Simple algebra-calculus question

lifelearner · Apr 4, 2010

1. Homework Statement , and relevant equations

How is A6 arrived at and *how* did they get the "Q" in A6?

Typeset equations A1 to A8: utility u(C, L, G) = C^α L^β G^γ; maximise subject to budget constraint C = w(1 − Δt − t0)(L̄ − L); and derived relations ending with d(Δt)/dG = (α + β)/(α H w L̄).

Printed text listing assumptions: alpha, beta and gamma are greater than 0; w is fixed; L-bar is fixed; a note that equation A2 defines an indirect function V'(Δt, G).

Homework Equations

See above
3. The Attempt at a Solution

Objective: Rid A1 of L. They simply substituted "C" in A2 into A1. But how did they get rid of the L? I don't quite get the algebraic manipulation...please help

lifelearner · Apr 4, 2010

What I specifically do not understand is how the exponents, alpha and beta, have been manipulated to be ratios. The only way I think you can do that is by using logarithms, but I do not quite know how.

Anyone have any ideas?

Simple algebra-calculus question

Homework Equations

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