Homework Answers
6. An individual is willing to forgo increasing amounts of good Y for each additional units of good X. In such situation
a. U(X,Y) = X + Y2 is the utility functions which is consistent with these preferences.
Explanation
U(X,Y) = X + Y2 is the only utility function in which marginal utility of good X is increases. where as in the utility function b,c and d, marginal utility of good X is decreases. Therefore, only a. U(X,Y) = X + Y2 is the utility functions which is consistent with individual who is willing to forgo increasing amounts of good Y for each additional units of good X.
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6. An individual is willing to forgo increasing amounts of good Y for each additional unit...
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question #6
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question #6
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