- #1
Kesyt3
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This is a microeconomics problem that I am trying to solve. I am uncertain whether my FOCs are correct. Thank you.
The objective function: ui(x1i, x2i….xLi) = Σllog[xli];
The constraint: ΣLl=1p1xl ≤ w
L: Σllog[xli] + λ (w - ΣLl=1p1xl)
FOCs are:
L1 = 1/x1 – λ(w-p1) =0
L2 = 1/x2 – λ(w-p2) =0
:
LLi = 1/xLi - λ(w-pLi) =0
Lλ = w - ΣLl=1p1xl = 0
The objective function: ui(x1i, x2i….xLi) = Σllog[xli];
The constraint: ΣLl=1p1xl ≤ w
L: Σllog[xli] + λ (w - ΣLl=1p1xl)
FOCs are:
L1 = 1/x1 – λ(w-p1) =0
L2 = 1/x2 – λ(w-p2) =0
:
LLi = 1/xLi - λ(w-pLi) =0
Lλ = w - ΣLl=1p1xl = 0