I'm trying to figure out how to plot basic utility maximization results with
R, Ideally I'd like to plot the value of u through x1,x2 space, so you can
graph income / substitution effects easily...
also, it'd be nice if I could put a linear budget constraint on the graph
here's an example with cobb douglas utility
u <- function(x) {
x1 <- x[1]
x2 <- x[2]
(x1^alpha)*(x2^(1-alpha))
}
utility <- function(x) x[1]^(alpha)*x[2]^(1-alpha)
p <- c(2,1)
i <- -100
alpha <- .3
umax <- function(p,i,u) {
res <- constrOptim(c(.5,.5), u, grad=NULL, ui=-p, ci=i, mu = 1e-04,
control=list(fnscale=-1))
return(res)
}
curve(umax, c(c(2,1),c(2,1)), c(10,100))
--
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