Given the utility function:U = X 3/4 1/4

Subject:EconomicsPrice: Bought3

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Given the utility function:U = X 3/4 1/4

. Y

Estimate the demand functions of commodity X and commodity Y using Lagrange method, if it is given that price of X is Px and price of Y is Py and Income is M.

 

Q1) Given the utility function:

U = X ^3/4 . Y^1/4

Find out the optimal quantities of the two commodities using Lagrange method and simplified procedure, if it is given that price of X is Rs.6 and price of Y is Rs.3 and income is equal to Rs.120.