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Unformatted text preview: g ( x ) formed by taking those rows i for which g i ( x * ) = c i has the maximum possible rank, then there is a value of such that L x ( x * , ) = 0 . L ( x * , ) , , i L i ( x * , ) = 0 . Example: Quasi-Linear Preferences (Dixit, 1990, pp.31-34) Consider max U ( x,y ) = y + a log( x ) subject to px + qy I x y 1 where a > 0. Example: Technological Unemployment (Dixit, 1990, pp.3437) max ln x + ln y subject to 2 x + y 300 x + 2 y 450 x y where , > 0 and + = 1. Suggested Exercises. Read Section 18.318.7 and 19.3 of Simon and Blume (1994) and do exercises 18.12, 18.18 and 19.14. 2...
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This note was uploaded on 10/22/2009 for the course ECG 765 taught by Professor Fackler during the Fall '07 term at N.C. State.
- Fall '07