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Gene has the following utility function: U = XY + 2Y, the Px = $4, the Py = $1 and I=$6.
a. Find Gene’s MRSx,y
b. Is the MRSx,y increasing, decreasing, or constant with respect to X?
c. What is the slope of the budget constraint?
d. Find the optimal X and Y.
e. At the optimal X* and Y* calculate and interpret the MUx/Px & MUy/Py.
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