Budget Constrained Maximization of “Cobb-Douglas with Linear Components” Utility Function
In what follows, we provide the demand analysis associated with budget constrained linear utility maximization for each of several categories of goods, with the marginal rate of consumption expenditure-as a share of wealth- being a positive constant less than one. The marginal rate of consumption expenditure is endogenously determined, by a budget constrained “Cobb-Douglas with … Read more