3. (ICs for Quasi-Linear Preferences) Consider the utility function: u(x, y) = x1/2 + y.

a. Find the expression for the MRS (= – dy/dx).

b. Draw one IC making sure its shape reflects your expression for MRS above.

c. Given your expression for MRS, draw another IC above the one you just drew, and comment on how the slopes of the ICs compare at a given level of x (e.g., at x = 1).

Answer rating: 100% (QA)

a The MRS is given by the slope of the indifference curve which is the ratio of the marginal util... View the full answer