can we derive the demand function of X and Y in a general form using a method of Lagrange multipliers given that: Maximize U = a.lnX+(1-a).lnY.
subject to I = P.X +P.Y

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Answer:

l dont know.... but

Step-by-step explanation:

hopes it help

The Lagrange multipliers technique used to find the local maxima and minima of function.

The demand function of X and Y in general form is [tex]I=\dfrac{1}{a}\times x\times P_x[/tex].

Given:

Maximize [tex]U=a\log x+(1-a)\log y[/tex]

Find the derivative of given function with respect x.

[tex]mu_x= \dfrac {\partial u}{\partial x}=a\times \dfrac{1}{x}+(1-a)\times 0\\ mu_x=\dfrac{a}{x}[/tex]

Find the derivative of given function with respect Y.

[tex]mu_y= \dfrac {\partial u}{\partial y}=a\times 0+(1-a)\times \dfrac{1}{y}\\ mu_x=\dfrac{1-a}{y}[/tex]

Now equate the above two equation.

[tex]\dfrac {mu_x}{P_x}=\dfrac{mu_y}{P_y}[/tex]

Substitute the value.

[tex]\begin{aligned}\dfrac{\frac{a}{x}}{P_x}&=\dfrac{\frac{1-a}{y}}{P_y}\\\dfrac{a}{x\times P_x}&=\dfrac{(1-y)}{y\times P_y}\\a_y\times P_y&=(1-a)\times P_x\\y&=\dfrac{1-a}{a}\times x\times \dfrac{P_x}{P_y}\\\end[/tex]

As per the question,

[tex]I=P\times x+P\times y[/tex]

Substitute the value of y.

[tex]I=P\times x+P\times \dfrac{1-a}{a}\times x\times \dfrac{P_x}{P_y}\\I=x\times P_x\times \left (\dfrac{a+1-1}{a}\right)\\I=\dfrac{1}{a}\times x\times P_x[/tex]

Thus, the demand function of X and Y in general form is [tex]I=\dfrac{1}{a}\times x\times P_x[/tex].

Learn more about Lagrange multipliers here:

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