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Question

Maximize each of the following utility functions, with the cost of each commodity and total amount available to spend given. f(x,y)=x3y4f(x, y)=x^{3} y^{4}, cost of a unit of is $3, cost of a unit of is$3, and $42 is available.

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Answered 6 months ago
Answered 6 months ago
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Once again we use the fact that neither xx or yy can be zero if we are trying to obtain the maximum. The constraint function is g(x,y)=3x+3y=42g(x,y)=3x+3y=42. Lagrange multiplier equations are:

3x2y4=3λ4x3y3=3λx+y=16\begin{align*} &3x^2y^4=3\lambda\\ &4x^3y^3=3\lambda\\ &x+y=16\\ \end{align*}

Combining the first and the second equations give us x2y3(4x3y)=0x^2y^3(4x-3y)=0. Use the third equation to get x=6x=6. From there y=10y=10. Hence the maximum is at (6,10)(6,10).

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