An individual's utility function is given by u = 1000 x, + 450x. + 5x, x. - 2x - x where x, is the amount of leisure measured in hours per week and x,is income earned measured in cedis per week. Det er mine the value of the marginal utilities, when x, = 138 and x= 500. Hence est imate the change in utility if the individual works for an extra hour, which increa ses earned income by GH¢15 per week. Does the law of diminishing utility hold for this function? %3D
An individual's utility function is given by u = 1000 x, + 450x. + 5x, x. - 2x - x where x, is the amount of leisure measured in hours per week and x,is income earned measured in cedis per week. Det er mine the value of the marginal utilities, when x, = 138 and x= 500. Hence est imate the change in utility if the individual works for an extra hour, which increa ses earned income by GH¢15 per week. Does the law of diminishing utility hold for this function? %3D
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 7P
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