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1. a. The utility function of Alan is U = 10X0.270.8. Initially, he spends his budget to consume 10 units of X and 20 units

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1. a. The utility function of Alan is U = 10X0.270.8. Initially, he spends his budget to consume 10 units of X and 20 units of Y. The price of good X is $P and the price of good Y is $4P. Find the functions of MUx and MUY. Find the MRS of X at his initial consumption bundle. With the same budget, explain how Alan can achieve a higher utility level by changing his consumption bundle. b. C

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