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Suppose the utility function for a consumer is given by U = 5XY. X is the...

Suppose the utility function for a consumer is given by U = 5XY.

X is the amount of Good X and Y is the amount of Good Y.

a) Neatly sketch the utility function. [Ensure that you label the graph carefully and state any assumptions that you make in sketching the curve.]

b) Does this utility function exhibit diminishing marginal utility? [Ensure that you explain your answer fully.]

c) Calculate the marginal rate of substitution. [Ensure that you explain your answer fully and state any assumptions that you make.]

d) Neatly sketch two indifference curves based on the utility function above. [Ensure that you label the graph carefully, and depict three points on each curve.]

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