1. (a) If your utility is represented by u(x; y) = min(x+2y; 2x+y). What

does your indifference curves look like?

(b) Given your answer in (a), obtain the MRS (marginal rates of sub-

stitution).

(c) Suppose the prices of x and y are px = $3 and py = $1 and you

have 100 dollars. What would you choose?

(d) If px decreases to $1; what would you choose?

(e) Use the Slutsky decomposition to decompose the total price e.ect

into the substitution effect and income effect when px decreases

from $3 to $1: