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Suppose that a consumer's preferences exhibit a diminishing marginal rate of substitution and can be represented by a utility function u. If u(12, 5) =
Suppose that a consumer's preferences exhibit a diminishing marginal rate of substitution and can be represented by a utility function u. If u(12, 5) = u(8, 7) , MRS(12, 5) = 1 and MU2(8, 7) = 3, what can you say about MU1(8, 7)? Note that MU2(8, 7) denotes the consumer's marginal utility of good 2 at consumption bundle (8, 7), and so on. (Hint: Compare MRS(12, 5) to MRS(8, 7))
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