1. Consider an individual's utility for food (x) and drink (y) is given by the following Cobb Douglas utility function: u(x, y) = x^0.3 y^0.7

a) Derive the individual's demand curve for food and drink (Hint: solve for the utility maximising values of and for any set of prices ( Px Py) and income ()).

b) Suppose sells for 1, sells for 4 and total income is 8.

Calculate the optimal consumption choices and the maximised utility value.

c) Compute the value for the Lagrange multiplier for the individual's budget constraint