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and preferences.

1) Check that utility function is monotone. That is, at the optimum, the consumer spends all of his income.2) Check that the utility function is quasi-concave. That is, the second order condition for maximum holds. In the two goods example the second-order condition implies that the utility function should be convex. In this case, optimal bundle lies in the tangency point between the utility function (See Figure 1).

3) Apply

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