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7. Suppose that a consumer's utility function is U = x1x2 and the corresponding marginal rate of substitution between x1 and x2, where x1 is
7. Suppose that a consumer's utility function is U = x1x2 and the corresponding marginal rate of substitution between x1 and x2, where x1 is on the horizontal axis and x2 is on the vertical axis, is given by MRS = x2/x1. The budget constraint is given by 2x1 + 4x2 = 80. What is the optimal consumption bundle for this consumer?
A) x1 = 30 and x2 = 5
B) x1 = 20 and x2 = 10
C) x1 = 10 and x2 = 15
D) x1 = 0 and x2 = 20
E) None of the above
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