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(b) At the most affordable point, what is Kerry’s marginal rate of substitution (MRS) of good X for good Y? Explain briefly how you obtain the result.
(c) Copy the budget line and indifference curve I2 on your answer sheet. Suppose the prices of good X decrease by $2 per unit. Sketch (as accurately as you can) the new budget line in the diagram and indicate the new equilibrium point by drawing an additional indifference curve.
Attachment:- 531759_1_Eco.docx
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Structures and Functions of Financial Institutions
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