Question: Given the Utility function U(X,Y) = X.5 + Y.5 Write mathematical expressions for marginal utility of x and marginal utility of y Does the consumer

Given the Utility function U(X,Y) = X.5 + Y.5

  1. Write mathematical expressions for marginal utility of x and marginal utility of y
  2. Does the consumer the assumption of non-satiation (more is better) desire more of x and y?
  3. If the quantity of Y is held constant, does the marginal utility of x increase, remain constant or diminish as x increases? Prove your answer
  4. Derive an expression for the marginal rate of substitution of x for y.
  5. If Price of X equals 1 and price of Y equals 1 and income equals $200, what utility maximizing quantity of x and quantity of y will the consumer choose.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!