Write down the optimality conditions for maximizing function

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Reference no: EM133613910

Problem: Suppose a person has a Cobb-Douglas utility function U (x1; x2) = x1x2. Denote the prices of the goods as p1 and p2, and the income of the person as I. Write down the optimality conditions for maximizing the utility function subject to the budget constraint. Derive the (Marshallian) demand functions x1 (p1; p2; I) and x2 (p1; p2; I). Find the personís indirect utility function V (p1; p2; I).

Reference no: EM133613910

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