Question 3 Utility Maximization Marge has the utility function U(F,H)=20F?H where F is the quantity of footwear and H is the quantity of hats she consumes. Suppose the price of footwear is $20 and the...


Question 3 Utility Maximization<br>Marge has the utility function<br>U(F,H)=20F?H<br>where F is the quantity of footwear and H is the quantity of hats she consumes.<br>Suppose the price of footwear is $20 and the price of hats is $5, while Marge<br>has an income of $200/week.<br>1. Calculate Marge's MRS as a function of the quantities F and H.<br>2. BONUS: Write down the Lagrangian function for Marge's utility<br>maximization problem.<br>3. Solve for Marge's optimal consumption bundle of footwear and hats, You can<br>either use the Lagrangian from part b or use any other method you likeli<br>

Extracted text: Question 3 Utility Maximization Marge has the utility function U(F,H)=20F?H where F is the quantity of footwear and H is the quantity of hats she consumes. Suppose the price of footwear is $20 and the price of hats is $5, while Marge has an income of $200/week. 1. Calculate Marge's MRS as a function of the quantities F and H. 2. BONUS: Write down the Lagrangian function for Marge's utility maximization problem. 3. Solve for Marge's optimal consumption bundle of footwear and hats, You can either use the Lagrangian from part b or use any other method you likeli

Jun 07, 2022
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