Question
Carmen is a writer who enjoys writing with both pencils and pens. Her utility function for pencils and pens is given by U = 4X
Carmen is a writer who enjoys writing with both pencils and pens. Her utility function for pencils and pens is given by U = 4X + 2Y where X is the number of pencils she buys and Y is the number of pens. Carmen currently has 2 pencils and 4 pens.
a. Calculate Carmen's current utility.
b. What is the marginal utility of an additional pencil, MUX?
c. What is the marginal utility of an additional pen, MUY ?
d. Calculate the MRSXY at Carmen's current consumption level:
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Economics The Basics
Authors: Michael Mandel
2nd Edition
0073523186, 9780073523187
