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Murphy's Utility Function Is U(x, Y) = Min{ 4x

question 11

Essay

Murphy's utility function is U(x, y) = min{ 4x + y, 2x + 2y, x + 4y}. Murphy is consuming 12 units of x and 6 units of y.
a. Draw the indifference curve through this point. At what points does this indifference curve have kinks?
b. The price of good x is $1. What is the highest possible price for y? What is the lowest possible price for y?


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