Antonio's utility function for the goods X and Y is U(X, Y) = 2(X + Y). a.
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b. Suppose his monthly income is $1800 and X and Y both cost $1 per unit. What is his best choice?
c. Suppose the price of good X rises to $2 per unit. What is his new best choice? Decompose the change in his purchases into substitution and income effects. What is his compensating variation for the price change?
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a What is his MRS XY His preferences satisfy the declining MRS property b His best choice isX 900 Y ...View the full answer
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