Question
Suppose a person has a utility function given by U = [ x^ 0.2+ y^ 0.2]^5. MUx =[ x^0.2 + y^0.2 ]^4 x^-0.8 MUy =[
Suppose a person has a utility function given byU= [x^0.2+y^0.2]^5.
MUx=[x^0.2+y^0.2]^4x^-0.8
MUy=[x^0.2+y^0.2]^4y^-0.8.
This utility function exhibits the property of diminishingMRSx,y. and the elasticity of substitution is constant equal to 1.25.
True or False?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
International Business
Authors: John Daniels, Lee Radebaugh, Daniel Sullivan
16th edition
134200055, 978-0134201542, 013420154X, 978-0134200057
