Leonidas has a utility function u(x, y) = x + 3y, an income of 12 and works in Sparta, where the prices of x and y are both 2. (a) What is Leonidas’ current utility? (b) Leonidas’ boss is thinking of sending him to Athens where the price of x is 1 and the price of y is 4. Leonidas says this is as bad as a cut in pay of γ. What is γ equal to? (b) He also says that he wouldn’t mind moving if his pay was increased by δ when he moved. What is δ equal to?

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