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Suppose the utility function of an individual is given by: U(x,y) = xy^2 (A) This utility function implies that good y is preferred to good

Suppose the utility function of an individual is given by: U(x,y) = xy^2

(A) This utility function implies that good y is preferred to good x so the bun- dle (2, 1) is preferred to (9, 0.5).

(B) The marginal rate of substitution between y and x is MRSx,y = 2y. x

(C) The marginal rate of substitution between y and x is decreasing in x.

(D) The marginal rate of substitution between y and x is decreasing in y.

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