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. Lous preferences over pizza (X) and other goods (Y) are given by U(X, Y)- XY, with associated marginal utilities MUx = Y and MUys: X. His income is $120. (a) Calculate his optinal basket when Px = 4 and B. 1. (b) Calculate his income and substitution effects of a decrease in the price of food to $3. (c) Calculate the compensating variation of the price change (d) Calculate the equivalent variation of the price change.

In detail show and explain all steps

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