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Consider the following table. It provides you with the Marginal Rate of Substitution between two goods. These values describe the consumer's indifference curve. Quantity of
Consider the following table. It provides you with the Marginal Rate of Substitution between two goods. These values describe the consumer's indifference curve.
Quantity of Y Quantity of X MRS
5 1 5
4 2 2
3 3 1
2 4 0.5
1 5 0.2
Suppose the Price of X is $10 and the Price of Y is $2. The consumer's income is sufficient to reach only the optimal consumption point on this indifference curve.
Given these prices the consumer should consume........ units of X and......... units of Y.
Solve for units x and y
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