The answer should be typed . A consumer's preferences are given by the following Cobb-Douglas utility function:6511. 11u(x,y) = 5.5 x yAssume Px > 0, P, > 0, and I > 0.a. In the limit, what is the marginal utility of x as x goes to zero and what is the marginal utility of yas y goes to zero?lim MUX = 0x-0lim Muy = 0y-0 Assume consumer preferences satisfy the assumptions we discussed in class and consider ageneric consumer utility maximization problem:max u(x,y)x.ys.t.Pxx +Pyy ≤ 1x>0, y20Why do we need a budget constraint? Suppose we didn't have a budget constraint. How much xand y would be consumed and what would be the consumer's utility?=0u(x". y") = 0=

Utility is defined as the satisfying power of a commodity. The consumers in society make decisions…

A consumer's preferences are given by the following Cobb-Douglas utility function: 65 11. 11 u(x,y) = 5.5x¹¹ y Assume Px > 0, P, >0, and 1>0. a. In the limit, what is the marginal utility of xas x goes to zero and what is the marginal utility of y as y goes to zero? lim MU= 0 x-0 lim Muy = 0 y-o

A consumer's preferences are given by the following Cobb-Douglas utility function: 65 11. 11 u(x,y) = 5.5x¹¹ y Assume Px > 0, P, >0, and 1>0. a. In the limit, what is the marginal utility of xas x goes to zero and what is the marginal utility of y as y goes to zero? lim MU= 0 x-0 lim Muy = 0 y-o

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

The answer should be typed .

A consumer's preferences are given by the following Cobb-Douglas utility function:
65
11. 11
u(x,y) = 5.5 x y
Assume Px > 0, P, > 0, and I > 0.
a. In the limit, what is the marginal utility of x as x goes to zero and what is the marginal utility of y
as y goes to zero?
lim MUX = 0
x-0
lim Muy = 0
y-0

Assume consumer preferences satisfy the assumptions we discussed in class and consider a
generic consumer utility maximization problem:
max u(x,y)
x.y
s.t.
Pxx +Pyy ≤ 1
x>0, y20
Why do we need a budget constraint? Suppose we didn't have a budget constraint. How much x
and y would be consumed and what would be the consumer's utility?
=0
u(x". y") = 0
=

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