Consider a consumer with preferences u(x, y) = 2x+y, (MU = 1/x, MU = 1). These...

 

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Consider a consumer with preferences u(x, y) = 2x+y, (MU = 1/x, MU = 1). These preferences have a declining MRSxy Assume that px=1 and py=1 and that the consumer has an income M=100. Calculate the income effect associated with good x if the price of good x increases to p'x=3.0. No units no rounding. Consider a consumer with preferences u(x, y) = 2x+y, (MU = 1/x, MU = 1). These preferences have a declining MRSxy Assume that px=1 and py=1 and that the consumer has an income M=100. Calculate the income effect associated with good x if the price of good x increases to p'x=3.0. No units no rounding.