You are given the following utility function and price of commodities q1 and q2: U = 3q1+q1q2-5q2-15 P1=3 and p2=2 If the corresponding bugdet is 20. i. Write the consumer’s budget equation ii.construct a constrained utility maximization problem out of the information given above iii. Write the augmented objective function? Iv. Find the optimum level of U V. Is the second order condition for a maximum satisfied? Vi. Find the levels of q1 and q2 that will satisfy the first order condition for a maximum.

/in /by

You are given the following utility function and price of commodities
q1 and q2:

U = 3q1+q1q2-5q2-15

P1=3 and p2=2

If the corresponding bugdet is 20.

i. Write the consumer’s budget equation

ii.construct a constrained utility maximization problem out of the
information given above

iii. Write the augmented objective function?

Iv. Find the optimum level of U

V. Is the second order condition for a maximum satisfied?

Vi. Find the levels of q1 and q2 that will satisfy the first order
condition for a maximum.

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