Let ₁ and 2 be the amounts of two goods whose joint utility function is U (x1, x2) = 9x₁ + 3x2 − 4x² − x². - (a) Compute the partial derivatives au Əx₁' au 2² U Əx₂' dx²¹ 2² U dx²2 (b) Does the law of diminishing marginal utility hold for this utility function? Justify your answer. (c) Find the marginal rate of commodity substitution (MRCS) when x₁ = 1 and x₂ = 1/2.

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Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.