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Emily's preferences can be represented by u(x,y) = x1/2 y1/2 . Emily faces prices (px,py) =...

Emily's preferences can be represented by u(x,y) = x1/2 y1/2 . Emily faces prices (px,py) = (2,1) and her income is $60. (some formulas in chapter 5 might help)

Her optimal consumption bundle is: ______________ (write in the form of (x,y) with no space)

Now the price of x increases to $3 while price of y remains the same

Her new optimal consumption bundle is: ______________  (write in the form of (x,y) with no space)

Her Equivalent Variation is: $_______________

Her Equivalent Variation is: $

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