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In: Economics

Consider the following utility function: U = 100X0.10 Y 0.75. A consumer faces prices of Px...

Consider the following utility function:

U = 100X0.10 Y 0.75.

A consumer faces prices of Px = $5 and Py =$5.
Assuming that graphically good X is on the horizontal axis and good Y is on the vertical axis, suppose the consumer

chooses to consume 7 units of good X and 15 units of good Y. Then the marginal rate of substitution6 is equal to:
MRS = . (Enter your response rounded to two decimal places. Do not forget to include the negative

sign.)
Use absolute values.

The consumer should consume (1) to maximize utility.

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