c) If the value of timber is the following increasing function of time:V = 2tExpressed in units of Rs. 1000. Assuming a discount rate of r and also assuming zeroupkeep cost during the period of timber growth, what is the optimal time to cut the timberfor sale? Calculate optimal time for r = 5%Question 03.a) Maximize the utility function U = X0Y025 subject to budget constraint680 = 8X + 5Y Also show that above utility function is homogenous and homothetic.5P+ P?andb) Find the demand function Q =f (P) if elasticity of demand is -Q = 500 when P = 10c) Write down the first order and second order conditions for maximum andfunction y = f(x1, X2, X3,.......... Xn).minimum of a

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Answered: a) Maximize the utility function U =…

a) Maximize the utility function U = X0°Y°25 subject to budget constraint 680 = 8X + 5Y Also show that above utility function is homogenous and homothetic.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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