Question

What is the marginal rate of substitution for the utility function U=2X+3Y ?

What is the marginal rate of substitution for the utility function U=2X+3Y ?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Marginal rate of substitution is the rate at which the consumer is willing to give up one good in order to obtain one more unit of the other good. It is also the slope of the indifference curve.

Marginal rate of substitution = marginal utility of good X / Marginal utility of good Y

Marginal Utility of good X can be calculated by differentiating the utility function with respect X keeping Y constant. So, marginal utility of good X = 2

Marginal Utility of good Y can be calculated by differentiating the utility function with respect Y keeping X constant. So, marginal utility of good Y = 3

So, marginal rate of substitution = marginal utility of good X / Marginal utility of good Y

= 2/3 is the answer.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
For the utility function U(X,Y) = XY^3, find the marginal rate of substitution and discuss how...
For the utility function U(X,Y) = XY^3, find the marginal rate of substitution and discuss how MRS XY changes as the consumer substitutes X for Y along an indifference curve.
Suppose the utility function is given by U(x1, x2) = 14 min{2x, 3y}. Calculate the optimal...
Suppose the utility function is given by U(x1, x2) = 14 min{2x, 3y}. Calculate the optimal consumption bundle if income is m, and prices are p1, and p2.
1. Julia’s utility function is U=q1^0.4*q2^0.6 A. Calculate marginal utility for q1 B. Calculate marginal utility...
1. Julia’s utility function is U=q1^0.4*q2^0.6 A. Calculate marginal utility for q1 B. Calculate marginal utility for q2 C. Calculate marginal rate of substitution of
b) The consumers utility function is given by U(X,Y) = MIN(2X, 3Y), and the given bundle...
b) The consumers utility function is given by U(X,Y) = MIN(2X, 3Y), and the given bundle is X = 3 and Y = 1. i) MRS = __________________________________________________ ii) Draw your graph in this space:
1. In the utility function , does Y exhibit diminishing marginal rate of substitution? Please show...
1. In the utility function , does Y exhibit diminishing marginal rate of substitution? Please show your work. 2. What is the no-waste condition for the utility function Express your answer in terms of y as a function of x.
. Suppose utility is given by the following function: u(x, y) = min(2x, 3y) Suppose Px...
. Suppose utility is given by the following function: u(x, y) = min(2x, 3y) Suppose Px = 4, Py = 6, and m = 24. Use this information to answer the following questions: (a) What is the no-waste condition for this individual? (b) Draw a map of indifference curves for these preferences. Be sure to label your axes, include the no-waste line, and draw at least three indifference curves. (c) Given prices and income, what is the utility-maximizing bundle of...
Find  Marginal Utility for x and determine if it is diminishing  Marginal utility for...
Find  Marginal Utility for x and determine if it is diminishing  Marginal utility for y and determine if its diminishing  Marginal rate of Substitution of x for y (MRS xy) and determine if its diminishing U(x,y)=2x^(2/3)y^(1/3) U(x,y)=x^3+4y^(1/4)
(Hajikhameneh & Rietz) Answer the following questions for a consumer with utility function U(x, y) =...
(Hajikhameneh & Rietz) Answer the following questions for a consumer with utility function U(x, y) = x2 y2 and a budget constraint of g(x, y) = 2x + 4y = 40. You must show all of your work for full credit. a. What is the marginal utility of x? of y? b. In one to two sentences, define the economic meaning of the term “marginal utility.” c. What is the marginal rate of substitution for the given utility function? d....
The utility function is given by u (x1, x2) = x1^0.5+x2^0.5 1) Find the marginal rate...
The utility function is given by u (x1, x2) = x1^0.5+x2^0.5 1) Find the marginal rate of substitution (MRSx1,x2 ) 2) Derive the demand functions x1(p1, p2, m) and x2(p1,p2, m) by using the method of Lagrange.
Consider a consumer with preferences represented by the utility function u(x,y)=3x+6 sqrt(y) (a) Are these preferences...
Consider a consumer with preferences represented by the utility function u(x,y)=3x+6 sqrt(y) (a) Are these preferences strictly convex? (b) Derive the marginal rate of substitution. (c) Suppose instead, the utility function is: u(x,y)=x+2 sqrt(y) Are these preferences strictly convex? Derive the marginal rate of substitution. (d) Are there any similarities or differences between the two utility functions?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT