WeekofApr6Solutions

# WeekofApr6Solutions - 1. q = 100- 3 p p = 100 3- q 3 = (...

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Unformatted text preview: 1. q = 100- 3 p p = 100 3- q 3 = ( 100 3- q 3 ) q- wl- vk = ( 100 3- k l (1- ) 3 ) k l (1- )- wl- vk Taking the FOCs: k = ( 100 3- k l (1- ) 3 ) k ( - 1) l (1- )- ( k ( - 1) l (1- ) 3 ) k l (1- ) = v k = 100 3 k ( - 1) l (1- )- 2 3 k (2 - 1) l (2- 2 ) = v l = ( 100 3- k l (1- ) 3 ) (1- ) k l- - (1- ) ( k l- 3 ) k l (1- ) = w l = 100 3 (1- ) k l- - 2 3 (1- ) k (2 ) l (1- 2 ) = w k l = 100 3 k ( - 1) l (1- )- 2 3 k (2 - 1) l (2- 2 ) 100 3 (1- ) k l- - 2 3 (1- ) k (2 ) l (1- 2 ) = k- 1 l 1 (1- ) * 100 3 k l- - 2 3 k (2 ) l (1- 2 ) 100 3 k l- - 2 3 k (2 ) l (1- 2 ) = l (1- ) k = v w so l = (1- ) vk w = k , where = (1- ) v w Susbitituting back into the first FOC, 100 3 k ( - 1) ( k ) (1- )- 2 3 k (2 - 1) ( k ) (2- 2 ) = 100 3 (1- )- 2 3 k (2- 2 ) = v...
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## This note was uploaded on 12/21/2009 for the course ECON 1211 taught by Professor Govel during the Spring '08 term at Columbia.

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WeekofApr6Solutions - 1. q = 100- 3 p p = 100 3- q 3 = (...

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