Question: Consider a consumer with utility function u(x, y) = x + xy, where x and y stand for the quantities of goods 1 and 2

Consider a consumer with utility function u(x, y) = x + xy, where x and y stand for the quantities of goods 1 and 2 respectively. 1. Write down the marginal utility for goods 1 and 2. 2. Are these preferences monotone? 3. Does the consumer have a satiation or bliss point? 4. Write down the MRS between goods 1 and 2. 4 5. Does the MRS depend on the relative consumption of goods 1 and 2? 6. Graph two indifference curves for the consumer, and identify which one yields higher utility. 7. Are these preferences convex? Support your argument.

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