Calculus 4 12 (0) Joe Bob has a utility function given by u(x 1 , x 2 ) (a) Compute Joe Bobs marginal rate of substitution MRS(x 1 , x 2 ) (b) Joe Bobs straight cousin, Al, has a utility function v(x 1 , x 2 ) x 2 x 1 Compute Als marginal rate of substitution MRS(x 1 , x 2 ) (c) Do u(x 1 , x 2 ) an...

Calculus 4.12 (0) Joe Bob has a utility function given by u(x 1 , x 2 )

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Calculus 4.12 (0) Joe Bob has a utility function given by u(x₁, x₂) =

(a) Compute Joe Bob’s marginal rate of substitution: MRS(x₁, x₂) =____

(b) Joe Bob’s straight cousin, Al, has a utility function v(x₁, x₂) = x₂+x₁.

Compute Al’s marginal rate of substitution. MRS(x₁, x₂) =_____

(c) Do u(x₁, x₂) and v(x₁, x₂) represent the same preferences? _____ .Can you show that Joe Bob’s utility function is a monotonic transformation of Al’s? ________

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Intermediate Microeconomics

ISBN: 978-0393123968

9th edition

Authors: Hal R. Varian

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Question Posted: Dec 18, 2015 02:59 AM

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Calculus 4.12 (0) Joe Bob has a utility function given by u(x 1 , x 2 )

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ai+2r12+ x3.

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a 1 b Joe Bobs strai...View the full answer

Intermediate Microeconomics

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