You are a consumer of both red wine and white wine. The price of red wine is $20 and the price ofwhite wine is $10. Your marginal rate of substitution is 1. By plotting red wine is on the horizontal axisand white wine on the horizontal, first show graphically and then by the utility-maximizing equilibriumequation, whether your consumption of red and white wine is in fact maximizing your utility. If so, explainwhy; if not, what changes in your consumption will produce higher utility.
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