Let basket A be (x, y) = (4, 3). For each of the following utility functions...
Let basket A be (x, y) = (4, 3). For each of the following utility functions (a-d), answer the following questions (iiv):
i) Determine the utility at basket A
ii) Write out the equation for the indifference curve that basket A lies on. (simplify to y equals some function of x)
iii) Find 3 other points that lie on the same indifference curve as A.
iv) Calculate the MRSx,y at basket A and give an economic interpretation of what the means in words.
(a) U (x, y) = 9xy.
(b) U (x, y) = 2x2 + 5y2 .
(c) U (x, y) = 6x1/2 + y.
(d) U (x, y) = 8x + 7y.
Homework Answers
I have answered each parts except (iii) for functions (a-d)
The image below shows it.
Sorry i forgot to add (ii) for (d)
equation for indifference curve is ,
8x + 7y = 53
7y = 53 - 8x
y = (53-8x) / 7
Hope this helps
please comment for doubts
thanks
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