Question: Consider the problem
max U(x, y) = 100 - e-x - e-y subject to px + qy = m
(a) Write down the first-order conditions for the problem and solve them for x, y, and λ as functions of p, q, and m. What assumptions are needed for x and y to be nonnegative?
(b) Verify that x and y are homogeneous of degree 0 as functions of p, q, and m.