Question: Ann's utility function is U ( x , y ) = x + y , with associated marginal utility functions MU x = 1 and

Ann's utility function is U(x, y) = x + y, with associated marginal utility functions MUx= 1 and MUy= 1. Ann has income I = 4.

a) Determine all optimal baskets given that she faces prices Px= 1 and Py= 1.

b) Determine all optimal baskets given that she faces prices Px= 1 and Py= 2.

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