Let U(x, y) = 3x + y be the utility function of a consumer, who has a budget of I. As a function of I, find the consumer’s Walrasian demand when the prices are px = py = 1. The price of good x increases to 2, find the new Walrasian demand for the new prices px = 2 and py = 1. Decompose this change into an income and a substitution effect.

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