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This is an Intermediate Macroeconomics question which is troubling us. Can you help us please. Thank you. A consumer's preferences are represented by the following

This is an Intermediate Macroeconomics question which is troubling us. Can you help us please. Thank you.

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A consumer's preferences are represented by the following utility function: u(z, y) = 2Vx+ Vy+7 1. Recall that for any two bundles A = (xA, VA) and B = (TB, yB) the following equivalence then holds A _ B + u(A) Z u (B) Which of the two bundles (x1, y1) = (9,4) or (x2, 1/2) = (4,9) does the consumer prefer? 2. Take as given for now that this utility function represents a consumer with strictly convex preferences. Also remember that preferences are strictly conver when for any three bundles A, B, and C, if B Z A and C > A then aB + (1 - a)C > A for any a E (0, 1). Use this information and your answer to part (1) to determine which of the two bundles (x3, y3) = (7,6) or (21, y1) = (9, 4) the consumer prefers. Verify your answer. ! 3. Derive an expression for the marginal rate of substitution. Interpret the MRS. What is the MRS at the point (

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