Given that a are prices of X and Y respectively and the utility function is presented as (, ) =
0.4
0.6
,
a) Derive Marshallian demand functions. (10 marks)
b) Show whether the ordinary demand function for product Y is homogeneous of degree zero.
(4 marks)
c) Determine the marginal rate of substation of Y for X. (6 marks)
d) Calculate the maximum utility from products X and Y if the consumer has an income of
$12, = $2 a = $3