Re: 2011

Posted by mukund sharma on Jun 18, 2012; 4:48am
URL: http://discussion-forum.276.s1.nabble.com/2011-tp7578040p7578048.html

if u try to solve with the lagrangian method with the constraint u get 2.5 as the answer for the commodity x1
but use ur discriminative power and see the answer should be 10 as at that commodity bundle the utility is maximised at 10. so he purchases all of good x1 and nothing of x2. so the answer is 10.
if the answer would have been 2.5 then utility would have been only 7.5