Question

[ayushyakaul]

Could anyone solve this?

Max: x + log y

s.t p1.x+p2.y=M

[Shreya Agrawal]

I solve this for log with base e. that is, I maximize x+ln y with constraint p1*x+p2*y=M.
I think you can generalize it for any log base.

For better understandingof function x+ln y, click x+ln y=2, x+ln y=0 and x+ln y=-2 and zoom the graph vertically.

Now click here to see the function wholly. (Before you saw the "indifference curves" in terms of consumer theory.)

Now I give detailed answer in mathematical terms. The reference given are from Nicholson Snyder Microeconomic Theory.





Thank you.