a. Is the “more is better” assumption satisfied for both goods? Explain. b. What type of function is this? Explain. c. Provide expressions for the marginal utilities of x and y and does the marginal utility of x increase, remain constant, or diminish as the consumer buys more units of x? Explain. Does the marginal utility of y increase, remain constant, or diminish as the consumer buys more units of y? Explain. d. Provide an expression for the marginal rate of substitution of x for y. e. Is MRSx,y diminishing, constant, or increasing as the consumer substitutes more x for y along an indifference curve? Explain. f. On a graph with x on the horizontal axis and y on the vertical axis, draw the indifference curves for U1 and U2 where U2 has a higher value than U1
a. Is the “more is better” assumption satisfied for both goods? Explain.
b. What type of function is this? Explain.
c. Provide expressions for the marginal utilities of x and y and does the
more units of x? Explain.
Does the marginal utility of y increase, remain constant, or diminish as the consumer buys
more units of y? Explain.
d. Provide an expression for the marginal rate of substitution of x for y.
e. Is MRSx,y diminishing, constant, or increasing as the consumer substitutes more x for y along
an indifference curve? Explain.
f. On a graph with x on the horizontal axis and y on the vertical axis, draw the indifference
curves for U1 and U2 where U2 has a higher value than U1
instructions: answer d,e, and f only
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
