Question: Question 1. [10 points] Toto's utility function is given by U = 4 * log(X) + 2Y . Assume X > 0 and Y >

Question 1. [10 points]

Toto's utility function is given by U = 4 * log(X) + 2Y .

Assume X > 0 and Y > 0

a) [4 points] Calculate the Marginal Rate of Substitution of X for Y (MRS)

for Toto's utility function..

b) [2 points] How does the MRS,,, change when Y goes up? Briefly explain

Toto's consumption behaviour regarding good X.

c) [4 points] Draw two indifference curves having this type of MRS. (no need to scale.) How would your graph change if the utility function was U = [4 log(X) + 2Y]?

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