Re: Kuhn-Tucker conditions; intermediate microeconomics
by highest, i meant optimal bundle. x represents a bundle of goods x1 and x2. so graphing x1 on the x axis and x2 on the y axis, we have indifference curves that represent where the consumer is at the same utility. then we have a budget line, and the optimal bundle is the point where an IC is tangent to that budget line.
i don't have an example problem, since this stuff isn't in the book, and the only material i have of them are the lecture notes. but from class, it seems that a problem could be "show that the optimal bundle of some given utility function and some range of income and prices satisfies the kuhn tucker conditions."
so i'm guessing that he'll give something like U(x) = x1x2 and give values for y, p1, and p2 and i have to plug them into the conditions?
|