ECON 100A Lecture Notes - Lecture 22: Engel Curve
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U (x1, x2) = 2q1 + q1q2 + q2 s. t. p1 = 2, p2 = 1, i = 20. = 2q1 + q1q2 + q2 + (20 2q1 q2) F. o. c: 2 + q2 2 = 0, q1 + 1 = 0, 20 2q1 q2 = 0. 2 + q2 = 2q1 + 2. U (x1, x2, x3) = 2x1 + 3x2 +x3. What is the demand for x2 (p1, p2, p3, i) 3 / p2 > 2 / p1 and 3 / p2 > 1 / p3 x2 = i / p2. U (d, p) = d + 100p p2. D - # of daises, p - # of poppies. Both d and p are present. what can you say about garden size each d takes 1 ft2, each p takes 4 ft2. F. o. c: 1 - = 0, 100 2p 4 = 0, s d 4p = 0. S d 4p = 0.
