Question
Consider the twice-differentiable utility function u(x1, x2) defined over the goods x1, x2. Defined an indifference curve for this function by = u(x1, x2)
Consider the twice-differentiable utility function u(x1, x2) defined over the goods x1, x2. Defined an indifference curve for this function by = u(x1, x2) as the various combinations of (x1, x2) that yield a given level of utility . (a) (15 marks) Totally differentiate the expression expression for the slope of the indifference curve, der dx2 = . u(x1, x2), and find an (b) (10 marks) What property must we assume that the utility function has to imply that the slope of the indifference curve is negative?
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Get StartedRecommended Textbook for
Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
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