 Solution

The assertion is false. LetThe element $1/y$ does not belong to $A$: assigning degrees $\mathrm{deg}x=\mathrm{deg}y=1$ and $\mathrm{deg}(x/y)=0$ shows that every element of $A$ has nonnegative total degree, whereas $1/y$ has degree $-1$.

If $A=T^{-1}R$ for some multiplicative subset $T$, the membership $x/y\in T^{-1}R$ would give $x/y=a/t$ for some $a\in R$ and $t\in T$. Since $R$ is a unique factorization domain and $x,y$ are coprime, the equation $xt=ay$ implies $y\mid t$. Write $t=yu$. As $t$ is invertible in $T^{-1}R$, so iscontrary to $1/y\notin A$. Thus a subring of a localization of a ring need not itself be a localization of the original ring.