Suppose a person has a utility function given by U = [x + y]1/ where is
Question:
MUx = [xρ + yρ]1/ρ−1xρ−1
MUy = [xρ + yρ]1/ρ−1 yρ−1
Does this utility function exhibit the property of diminishing MRSx,y?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 63% (11 reviews)
Recall that Substituting in the marginal utilities given above yields Now be...View the full answer
Answered By
Jehal Shah
I believe everyone should try to be strong at logic and have good reading habit. Because If you possess these two skills, no matter what difficult situation is, you will definitely find a perfect solution out of it. While logical ability gives you to understand complex problems and concepts quite easily, reading habit gives you an open mind and holistic approach to see much bigger picture.
So guys, I always try to explain any concept keeping these two points in my mind. So that you will never forget any more importantly get bored.
Last but not the least, I am finance enthusiast. Big fan of Warren buffet for long term focus investing approach. On the same side derivatives is the segment I possess expertise.
If you have any finacne related doubt, do reach me out.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Economics questions
-
Tiffany's constant elasticity of substitution (CES) utility function is U(q(1, q(2) = (q(1 + q(2)1/(. Show that there is a positive monotonic transformation such that there is an equivalent utility...
-
Joe has a utility function over hamburgers and hot dogs given by U = x + y , where x is the quantity of hamburgers and y is the quantity of hot dogs. The marginal utilities for this utility function...
-
Suppose that you have a utility function given by the equation U = 50I. Consider a lottery that provides a payoff of $0 with probability 0.75 and $200 with probability 0.25. a) Sketch a graph of this...
-
Bollobs and Chung proposed a hybrid model that combines a 2-ring on \(V\) vertices ( \(V\) is even), plus a random matching. A matching is a graph in which every vertex has degree 1. To generate a...
-
Write a query to display the customer code, first name, and last name of all customers who have had at least one invoice completed by employee 83649 and at least one invoice completed by employee...
-
For Exercises state whether the variable is discrete or continuous. The number of mathematics majors in your school
-
Randomly selecting a statistics student and getting one who uses a TI calculator in class. Randomly selecting a statistics student and getting one who uses the STATDISK computer program. Determining...
-
Lambert Center began operations on July 1. It uses a perpetual inventory system. During July, the company had the following purchases and sales. Instructions (a) Determine the ending inventory under...
-
Gold Ltd manufactures specialised moulding machinery for both sale and lease. On 1 July 2022, Gold Ltd leased a machine to Silver Ltd, incurring $2200 in costs to prepare and execute the lease...
-
Forth Company owned 85,000 of Brown Companys 100,000 shares of common stock until January 1, 20X2, at which time it sold 70,000 of the shares to a group of seven investors, each of whom purchased...
-
Claire consumes three goods out of her income, food (F) shelter (S), and clothing (C). At her current levels of consumption, her marginal utility of food is 3 and her marginal utility of shelter is...
-
Annie consumes three goods out of her income, food (F) shelter (S), and clothing (C). At her current levels of consumption, her marginal rate of substitution of food for clothing is 2 and her...
-
Compute a one-way ANOVA on the following data. Determine the observed F value. Compare the observed F value with the critical table F value and decide whether to reject the null hypothesis. Use...
-
The average rent in a city is $1,220 per month with a standard deviation of $310. Assume rent follows the normal distribution. [You may find it useful to reference the z table.] a. What percentage of...
-
Details of Task: The COVID-19 pandemic is considered a major disruptor to the way managers communicate with their employees and external stakeholders (e.g. clients, suppliers, etc.). Make a critical...
-
Is there a downside to low interest rates? Ever since the 2008 Financial Crisis, the central banks world-wide have been keeping interest rates very low. In this lecture, you will learn how interest...
-
For the coding part of the midterm 2 you need to write down a Chomsky normal form context free grammar that will solve the balanced parentheses problem from homework 3 including the bonus part. For...
-
Two firms enter into a three-year currency swap requiring semi-annual payments. By the end of the swap, how many payments the two firms have exchanged? a) 12 b) 14 c) 16 d) 10
-
The process of renewing a drivers license at the traffic department in Egypt involves the following seven activities. These activities are currently performed in order and there are seven workers on...
-
Why is disclosure of depreciation or amortization methods and rates so important?
-
1. Fashion and Prices. You are in the market for a used car and have narrowed your options to two types of cars, type F and type P. According to Consumer Reports, the two types of cars have roughly...
-
1. There is asymmetric information in the used-car market because _________ (buyers/sellers) cannot distinguish between lemons and plums but _________ (buyers/sellers) can. 2. The supply curve for...
-
1. There is asymmetric information in the used-car market because _________ (buyers/sellers) cannot distinguish between lemons and plums but _________ (buyers/sellers) can. 2. The supply curve for...
-
3. Draw the logic diagram of the SOP minimized circuit 4. Use De Morgan's theorems to express the simplest SOP in terms of NAND operators. 5. Use the Karnaugh map method to find the simplest...
-
1. Consider the modification of the master-slave latch pair given in Fig. 1. a) Under a regularly changing clock CK, specify the sequence y1, 92, 93, 94 of output signals appearing at Q at the end of...
-
3.99 Write ARM assembly code to implement the following C statements, assuming all variables are 32-bit integers and a declaration of x[10], y[10]: for i=0; i < 10; i++) x[i] = 10 -1; v[9 - i] = 1;
Study smarter with the SolutionInn App