3
$\begingroup$

can someone please help me check my work for this question? I want to make sure I did it correctly.

Question:

enter image description here

Work:

enter image description here enter image description here enter image description here

Improve this question
$\endgroup$
0

1 Answer 1

Reset to default
5
$\begingroup$

That's correct, but it would be easier and faster to use

(i) $v=u^3=CL^2$ instead of $u$ as your utility function (which is allowed since $v$ is a positive transformation of $u$), and

(ii) the rule that in the optimum the ratio of marginal utilities equals the ratio of prices. This immediately gives you $7.5L=2C$, and substituting $2C$ for the $7.5L$ in the budget constraint then yields the solution.

Improve this answer
$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.