Question: A consumer consumes two (food) commodities, x and y. The consumer has utility function U(x,y) = (X - A) 2 *y and faces the budget

A consumer consumes two (food) commodities, x and y. The consumer has utility function U(x,y) = (X - A)² *y and faces the budget constraint P_x X+ P_yY M . The shift parameter A is age.

a) Find the marginal utility of money as a function of prices and age.

b) Use the envelope theorem to determine what happens to U(x*,y*) as the individual ages.

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