Answer to Question #81487 in Microeconomics for PIFOU Bianconeri

Question

1.A consumer is deciding on the consumption of goods A and B. The subsistence levels of A and B are α and β. The term I is income, and pk {k=A,B} are the prices of A and B. Hence the consumer maximization problem is given by:
max γln(A − α) + (1− γ)ln(B − β)
s.t pAA + pBB = I

find the demand curve for goods A and B.

Answer 1

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