Marta consumes only goods X and Y and faces the following utility function:U=7X+4Y

. The marginal utility for X isMU

X

=7

and the marginal utility for Y isMU

Y

=4

. The price of X is $10 and the price of Y is $50. Marta has an initial budget of $200.

How many of X and Y will Marta buy given her utility function, her budget, and the prices?

X=

Y=

Suppose that the government places a restriction on X so that Marta can only buy 10 X.

How much of Y mustMarta buy in order to achieve the same level of utility prior to the restriction?

(Round to the nearest 2 decimals places, we will NOT give marks for answers with rounding errors.)

What is the corresponding compensating variation?

(Round to the nearest 2 decimals places, we will NOT give marks for answers with rounding