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A consumers utility function is given by U = XY, where M UX = Y and M UY = X. a. What is the utility derived from 1 unit of X and 2 units of Y? What is the utility

A consumer€™s utility function is given by U = XY, where M UX = Y and M UY = X.
a. What is the utility derived from 1 unit of X and 2 units of Y? What is the utility derived from 2 units of X and 1 unit of Y? What is the utility derived from 5 units of X and 2 units of Y?
b. How does the consumer rank the following bundles?
A consumer€™s utility function is given by U = XY,

c. Graph an indifference curve that shows the bundles of X and Y for which U = 6 and U = 8. Is the €œmore is better€ assumption satisfied for X and Y?
d. What are M UX and M UY for the following bundles?

A consumer€™s utility function is given by U = XY,

e. Does MUX diminish, stay constant, or increase as X increases? (Hint: You must keep the values of all other variables fixed.)

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Quantity Quantity Bundle of X of Y 10 Quantity Quantity Bundle of X of Y

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a U 1 2 1 2 2 U 2 1 2 1 2 U 5 2 5 2 10 b From the table U D U E U C U A …View the full answer


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Related Book For  answer-question
Microeconomics

Microeconomics

ISBN: 9781464146978

1st Edition

Authors: Austan Goolsbee, Steven Levitt, Chad Syverson

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Posted Date: January 13, 2016 02:32:01
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