Math Problem Statement
Solution
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Math Problem Analysis
Mathematical Concepts
Optimization
Calculus
Utility Maximization
Lagrange Multipliers
Formulas
Lagrangian: L = (∫_0^1 c_t(i)^(ε-1)/ε di)^(ε/(ε-1)) + λ(E_t - ∫_0^1 P_t(i)c_t(i)di)
First-order conditions: ∂L/∂c_t(i) = 0, ∂L/∂λ = 0
Theorems
Lagrange Multiplier Theorem
First-order conditions in constrained optimization
Suitable Grade Level
Graduate Level (Economics, Advanced Mathematics)
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