Unformatted text preview: x 1 . ( Hint : Set MRS = p 1 / p 2 ) From 1 2 x = 2 1 p p , solve for x 1 : x 1 = 2 1 2 2 4 p p . (c) Calculate Ambrose’s demand for x 2 . ( Hint : Use the budget equation p 1 x 1 + p 2 x 2 = m ) Substitute for x 1 from (b) above into the budget equation and solve for x 2 : x 2 = 1 2 2 4 p p p m ! ....
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 Summer '07
 Dr.ShomuBanerjee
 Economics, Microeconomics, Utility, Neoclassical economics, X1, Marginalism, x1 + x2

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