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1. Agent E has a utility function u(x1, X2) = 21 + 2122 + 2 where the x' are the amounts of each good consumed.

1. Agent E has a utility function u"(x1, X2) = 21 + 2122 + 2 where the x' are the amounts of each good consumed. a What is the marginal rate of substitution between goods 1 and 2 for this agent? (3 marks) b) If agent E has a budget constraint, piti + p2x2 = m what is E's demand function for good 1? (5 marks) c) What is the own price elasticity for good 1? (2 marks)

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