An individual's utility function is U=(X+1)0.5 (Y+2) 0.5 (a) By implicit differentiation, find the slope of...
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An individual's utility function is U=(X+1)0.5 (Y+2) 0.5 (a) By implicit differentiation, find the slope of any indifference curve and show that it is given by the ratio of marginal utilities of the two goods. (b) Find the indifference curve for U=6 and show that it is negatively sloped and convex. Does the indifference curve cut the axes? What does this imply about this individual's tastes? An individual's utility function is U=(X+1)0.5 (Y+2) 0.5 (a) By implicit differentiation, find the slope of any indifference curve and show that it is given by the ratio of marginal utilities of the two goods. (b) Find the indifference curve for U=6 and show that it is negatively sloped and convex. Does the indifference curve cut the axes? What does this imply about this individual's tastes?
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a Now we have the slope of the indifference curve we term as the ma... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
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