Re: Utility labor-leisure sum plz help

Posted by Akshay Jain on Mar 31, 2013; 7:44pm
URL: http://discussion-forum.276.s1.nabble.com/Utility-labor-leisure-sum-plz-help-tp7579921p7579938.html

here we have to find the values of L and Y at which the function has a max value
find the following derivatives and then solve hessian matrix
dU/dL=0, d^2U/dL^2,
dU/dY=0, d^2U/dY^2,
d^2U/dYdL
hessian matrix = (d^2U/dL^2)*(d^2U/dY^2)-(d^2U/dYdL)^2
conditions for maxima
(d^2U/dL^2)<0
hessian matrix >0
optimum values L=100/17 Y=1340/51