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Alice only consumes bread (x1) and butter (x2). Her preferences over these goods are represented by u(x1, x2) = xqx .-. Alice used to live in Town A. There, she had an income of m = 12 and faced price

Alice only consumes bread (x1) and butter (x2). Her preferences over these goods are represented by u(x1, x2) = xqx .-. Alice used to live in Town A. There, she had an income of m = 12 and faced prices P1 = 2. Now, Alive lives in Town B, where her income is still m = 12 but prices are pı = 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 MRS1,2 at that bundle is b) If Alice is exactly as satisfied with her optimal bundle in Town B as she was with her optimal bundle in Town A, this means that a =

= 1 and P2 = Alice only consumes bread (x1) and butter (x2). Her preferences over these goods are represented by u(x1, x2) =

Jun 05 2021 View more View Less

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