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how to calculate this question b Alice only consumes bread (x1) and butter (x2). Her preferences over these goods are represented by u(x1, 362) =

how to calculate this question b

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Alice only consumes bread (x1) and butter (x2). Her preferences over these goods are represented by u(x1, 362) = x'l'x_a. Alice used to live in Town A. There, she had an income of m = 12 and faced prices p1 = l and p2 = 2. Now, Alive lives in Town B, where her income is still m = 12 but prices are p1 = 7 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 MRS]; at that bundle is 7 b) If Alice is exactly as satised with her optimal bundle in Town B as she was with her optimal bundle in Town A, this means that a =

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