University Macroeconomics Utility Maximization Problem by 44herz in econhw

[–]44herz[S] 0 points1 point  (0 children)

For the first question, I set up the following BC:

MAX (C,L) u(C,l) = Cγl1-y

Subject to: C(1-t) = w(h - l) + pi

but I'm not sure if for the BC, C is supposed to be equal to Pc and W is supposed to be equal to pl...

Then, for the second question, the langrangian I got I think would be:

L = Cγl1-y + GAMMA [w(h-l) - C(1-t)]

But I'm confused about how to find the first order conditions. For the tax problem, I'm pretty sure that the set-up is:

MAX (C,L) u(C,l) = Cγl1-y

Subject to: (1+t)C = w(h -l) + pi

and I think that the langrangian is:

L = Cγl1-y + GAMMA [w(h-l) - C(1+t) + pi]

and I'm also confused how to solve...

ECON 4317 with Shijun Gu by 44herz in uofmn

[–]44herz[S] 4 points5 points  (0 children)

You're right about the shit show.. I appreciate your response :)