ffefe

Q1) Household utility function
U = 4c – (24- l)2
U = 4c -576 + 48l – l2             ............................................... (1)
Budget Constrain: M= 10l+2c
Lagrangian Function f(c, l) = 4c – 576 +48l –l2 + λ(M-10l-2c) ........................ (2)
Marginal utility of Consumption (MUC) and Marginal utility of Labour (MUl)
MUC = = 4-2 λ. ............. (3),     MUI = = 48 – 2l -10 λ .............. (4)
Equating equation 3 =0, we...