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2. (POINTS: 12) Christina has preferences represented by the following utility function: u(x,y) = xy5 (a) What is Christina's marginal rate of substitution (MRS) as

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2. (POINTS: 12) Christina has preferences represented by the following utility function: u(x,y) = xy5 (a) What is Christina's marginal rate of substitution (MRS) as a function of arbitrary (posi- tive) quantities of x and y? (Points: 5) Assume the price of both goods is the same, i.e., Px = Py. (b) Explain why the allocation (1, 2) is not optimal for Christina. Hint: Compare the MRS and the price ratio. (Points: 7)

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