Characterize the optimal solution, x*, to the maximization problem in b. Be careful with both bounds, 0 and y.
Micro Economics b. Suppose the taxpayer is an expected utility maximizer with strictly increasing Bernoulli utility function u(W), where W is final wealth. Write down the corre-sponding maximization problem. c. Characterize the optimal solution, x*, to the maximization problem in b. Be careful with both bounds, 0 and y. d. Provide a condition under which […]