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The consumer maximization problem for Perfect Complements: Max U (z; w) subject to: m = pz*z...

The consumer maximization problem for Perfect Complements:

Max U (z; w)

subject to: m = pz*z + pw*w

a. Draw the indifference curves and explain

b. Find the optimal allocation, the consumption bundle that gives the highest utility (z*, w*) – explain every step.

c. What is the difference between consumption of z and consumption of w?

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