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Alice only consumes bread (x1 ) and butter (x2). Her preferences over these goods are represented by u(x1 , X2) = xi x, . Alice

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Alice only consumes bread (x1 ) and butter (x2). Her preferences over these goods are represented by u(x1 , X2) = xi x, ". Alice used to live in Town A. There, she had an income of m = 12 and faced prices p, = 1 and p2 = 2. Now, Alive lives in Town B, where her income is still m = 12 but prices are p1 = 6 and p2 = 1. If rounding is needed, please round to 3 decimal places. a) When Alice chooses an optimal bundle of bread and butter in Town B, her MRS12 at that bundle is 6 b) If Alice is exactly as satisfied with her optimal bundle in Town B as she was with her optimal bundle in Town A, this means that a = 0.279 V

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