For the following utility functions, Find the marginal utility of each good. Determine whether the
Question:
• Find the marginal utility of each good.
• Determine whether the marginal utility decreases as consumption of each good increases (i.e., does the utility function exhibit diminishing marginal utility in each good?).
• Find the marginal rate of substitution.
• Discuss how MRSXY changes as the consumer substitutes X for Y along an indifference curve.
• Derive the equation for the indifference curve where utility is equal to a value of 100.
• Graph the indifference curve where utility is equal to a value of 100.
a. U(X,Y) = 5X + 2Y
b. U(X,Y) = X0.33Y0.67
c. U(X,Y) = 10X0.5 + 5Y
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a UXY 5X 2Y MU X UXYX 5 MU Y UXYY 2 Marginal utility is constant for each good MRS XY MU X MU Y 52 M...View the full answer
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Related Book For 
Microeconomics
ISBN: 9781464146978
1st Edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
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