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Assume an individual only consumes only two commodities (commodity x and commodity y). His preferences are described by the following utility function: (, ) =

Assume an individual only consumes only two commodities (commodity x and commodity y). His preferences are described by the following utility function: (, ) = 0.5 + Assume Px is the price of commodity x and Py is the price of commodity y and he has a limited income of I. Determine the compensated demand functions, expenditure function, and indirect utility function and prove whether Roy's Identity holds.

(Please show your calculations)

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