Consumption to maximize her satisfaction level

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Karen's money income is $180, the price of X is $3, and the price of Y is $1.5. Given these prices and income, Karen buys 40 units of X and 40 units of Y. Call this combination of X and Y bundle C. At bundle C, Karen's Marginal Rate of Substitution between X and Y is 1/2. Is Karen maximizing her satisfaction level at bundle C? Explain. If not, how should Karen change her consumption to maximize her satisfaction level?

Reference no: EM131238772

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