Question: Sarah's preferences can be described by the utility function U(X, Y) = X2 + Y2. For this utility function, MUX = 2X and MUY =

Sarah's preferences can be described by the utility function U(X, Y) = X2 + Y2. For this utility function, MUX = 2X and MUY = 2Y. What is her MRSXY? Do her preferences have the declining MRS property? Draw the indifference curve corresponding to a utility level of 1 (that is, combinations of X and Y such that U(X, Y) = 1). If PX = 1, PY= 2, and M = 100, at what consumption bundle is her budget line tangent to an indifference curve? What is her best choice? Is there a difference and, if so, why?

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