Question: == 2. Suppose a person's preference is represented by U(X,Y) = x0.7y0.3, prices and income level are given as Px = 7 Py =

== 2. Suppose a person's preference is represented by U(X,Y) = x0.7y0.3,

== 2. Suppose a person's preference is represented by U(X,Y) = x0.7y0.3, prices and income level are given as Px = 7 Py = 6 1 =84 (a) Calculate MUX And MUY (b) Calculate and simplify the expression of the marginal rate of substitution MRSX for Y. Does this rate diminish as x increases and y decreases? (c) Write the budget constraint. (d) What is the consumption bundle to maximize the utility level? What is the maximum utility level?

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