3.7 Consider the following utility functions: a. U(X, Y) = XY. b. U(X, Y) = X 2Y...

Question:

3.7 Consider the following utility functions:

a. U(X, Y) = XY.

b. U(X, Y) = X 2Y 2

c. U(X, Y) = lnX+ In Y.

Show that each of these has a diminishing MRS, but that they exhibit constant, increasing, and decreasing marginal utility, respectively. What do you conclude?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Microeconomic Theory Basic Principles And Extensions

ISBN: 9780030335938

8th Edition

Authors: Walter Nicholson

See More Books

Question Posted: Nov 14, 2024 01:00 AM

See More Questions

Consider the following demand and supply equations for beer: QD =140?2P QS =20+P 7a) Find the equilibrium price and quantity of beer. 7b) What is the price elasticity of demand in equilibrium? Now...
help to solve these questions Question 1: Suppose U(X , Y)=4X2+3Y2 Ca. Calculate OU/ox, OU/dy. b. Evaluate these partial derivatives at x = 1, y = 2. "Write the total differential for U. d. Calculate...
E x pl ainan s w ers f or t h ese q u es t i o n s : Answer all: Problem set 1: Preferences and Utility Exercise 1: Suppose the utility function for two goods, X and Y, has the Cobb-Douglas form...
Equation 11.14 can be expressed in "coordinate-free" form by writing P0 cos = P0 r. Do so, and likewise for Eqs. 11.17, 11.18. 11.19, and 11.21.
1. Describe the jobs of different types of salespeople and list the characteristics of successful salespeople; identify a characteristic that you personally need to develop to be a successful...
Find i0(t) for t > 0 in the circuit in Fig. P6.43 using the step-by-step method. t=0 i(t) 10 mH
3.7 Consider the following utility functions: a. U(X, Y) = XY. b. U(X, Y) = X 2Y 2 . c. U(X, Y) = lnX+ In Y. Show that each of these has a diminishing MRS, but that they exhibit constant, increasing,...
The International City/County Management Association (ICMA) describes four types of solvency within the concept of financial condition. Identify each type and explain why each is important to the...
Tom and Melanie are siblings, who have inherited a large sum of money after the passing of their grandfather. Not knowing what to do with money, Tom and Melanie decide to purchase a property...
3.6 In footnote 8 of Chapter 3, we showed that in order for a utility function for two goods to have a strictly diminishing MRS (that is, to be strictly quasi-concave), the following condition must...
3.8 Example 3.3 shows that the MRS for the Cobb-Douglas function U(X, Y) = X aY^ is given by MRS= ^(Y/X). P a. Does this result depend on whether a + (3 = 1? Does this sum have any relevance to the...
An automobile company compares two types of front bumper for their new model by driving sample cars into a concrete wall at 15 miles per hour. The response is the amount of damage to the car, as...
7. A small manufacturer of circuit boards must process several jobs through their facility. Three machines with different capabilities are available (Machines A, B and C). Jobs are not...
As the principal of a public high school, you have a math teacher who cites verses from the Koran to students when the teacher believes the verses are relevant to the activities for the day. A parent...
Net sales for the year were $510,000 and cost of goods sold was $357,000 for the company's existing products. A new product is presently under development and has an expected selling price of $70 per...
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,100,000. During 2018, costs of $2,040,000 were incurred, with...
1 5 pints Required: Identify the financial statements on which each of the following items (titles, date descriptions, and accounts) appears by selecting "X" in the appropriate column. If an item...
Expensive amplifier A is rated at 250 W, while the more modest amplifier B is rated at 40W. (a) Estimate the sound level in decibels you would expect at a point 3.5m from a loudspeaker connected in...
How do network effects help Facebook fend off smaller social-networking rivals? Could an online retailer doing half as much business compete on an equal footing with Amazon in terms of costs? Explain.

3.7 Consider the following utility functions: a. U(X, Y) = XY. b. U(X, Y) = X 2Y...

Question:

Step by Step Answer:

Microeconomic Theory Basic Principles And Extensions

Students also viewed these Business questions