Question

Consider the utility function U(x, y) = x^0.4y^0.6, with MUx = 0.4 (y^0.6/x^0.6) and MUy = 0.6 (x^0.4/y^0.4).
a) Is the assumption that more is better satisfied for both goods?
b) Does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x? Explain.
c) What is MRSx, y?
d) Is MRSx, y diminishing, constant, or increasing as the consumer substitutes x for y along an indifference curve?
e) On a graph with x on the horizontal axis and y on the vertical axis, draw a typical indifference curve (it need not be exactly to scale, but it needs to reflect accurately whether there is a diminishing MRSx, y). Also indicate on your graph whether the indifference curve will intersect either or both axes. Label the curve U1.
f ) On the same graph draw a second indifference curve U2, with U2 > U1

Answer 1

The given question can be explained using the properties of indifference curves (IC). Infact ,it basically asks to illustrate and explain some of those properties.

ICs are concave to the origin because of diminishing MU.

More is always better , that's why a higher IC will give you higher utility.