1. (a)

If your utility is represented by u(x; y) = min(x + 2y; 2x + y);what do your indifference curves look like?

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

(c) Supposethepricesofxandyarepx =$3andpx =$1andyou 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 eect into the substitution eect and income eect when px decreases from $3 to $1: