Suppose that you have five consumption choices: good . An indifference surface is the set of consumption choices with a CONSTANT utility. For example if gives the same utility as than these are both points on the same indifference surface. An indifference map is the set of all indifference surface for EVERY given utility.

Consider the following utility map:

Where

The budget constraint gives the set of possible consumption choices with a given income. If you have an income of $768 and the price of good is given by . The equation for the budget line is given by: .

A utility maximizing combination of goods occurs when the surface given by the budget constraint is tangent to an indifference surface.

Find as a function of


(Use p1 for and likewise for .

The easiest way to solve this question is using Lagrange multiplier.
We define the Lagrange function to be:

Utility is maximized when all of the partial derivatives of the Lagrange function are equal to .