Question: Egon consumes two goods X and Y. Egon's utility function is UE = X 0.25 Y 0.5 . The price of X is $10, and
Egon consumes two goods X and Y. Egon's utility function is UE = X0.25Y0.5. The price of X is $10, and the price of Y is $5. Egon has $300 to spend this month.Egon is currently consuming X =20, Y = 20.
Egon's colleague Ray also consumes X and Y.At Ray's current bundle, Ray's MRS= -1. Using their MRS at these bundles (i.e. Egon's at X=20, Y=20),propose a mutually beneficial trade. Demonstrate both are better off after this trade.Be specific: Ray gives ___ to Egon; Egon gives ___ to Ray.Remember prices don't matter here.
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