*2.5 Suppose we calculate the MRS at a particular bundle for a consumer whose utility function is...
Question:
*2.5 Suppose we calculate the MRS at a particular bundle for a consumer whose utility function is U(q1, q2). If we use a positive monotonic transformation, F, to obtain a new utility function, V(q1, q2) = F(U(q1, q2)), then this new utility function contains the same information about the consumer’s rankings of bundles. Prove that the MRS is the same as with the original utility function. M(p. 18)
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Microeconomics Theory And Applications With Calculus
ISBN: 9780135183779
5th Edition
Authors: Jeffrey M. Perloff
Question Posted: