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Consider a consumer with preferences represented by the utility function U = Bx2 + y?. a) Find the marginal utility from x, the marginal utility from y. Does this consumer have diminishing marginal and y? Now find the expression for the MRS. b) Given your findings in part a) are these consumers' preferences i. complete and transitive? ii. continuous? iii strop g monotonic?

Consider a consumer with preferences represented by the utility function U = Bx2 + y?. a) Find the marginal utility from x, the marginal utility from y. Does this consumer have diminishing marginal and y? Now find the expression for the MRS. b) Given your findings in part a) are these consumers' preferences i. complete and transitive? ii. continuous? iii strop g monotonic?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question 3. Consider a consumer with preferences represented by the utility function U = Bx2 + y2. a) Find the marginal utility from x, the marginal utility from y. Does this consumer have diminishing marginal utility from x and y? Now find the expression for the MRS. b) Given your findings in part a) are these consumers' preferences i. complete and transitive? Page 2 ii. continuous? iii. strong monotonic? iv. strictly convex? Assume that the prices of x and y are both equal to 1. The consumer's budget is M. c) Write the consumer's utility maximization problem and the Lagrangian function. d) Write the Kuhn Tucker conditions. Here you must pay attention to the non-negativity constraints.
Transcribed Image Text:Question 3. Consider a consumer with preferences represented by the utility function U = Bx2 + y2. a) Find the marginal utility from x, the marginal utility from y. Does this consumer have diminishing marginal utility from x and y? Now find the expression for the MRS. b) Given your findings in part a) are these consumers' preferences i. complete and transitive? Page 2 ii. continuous? iii. strong monotonic? iv. strictly convex? Assume that the prices of x and y are both equal to 1. The consumer's budget is M. c) Write the consumer's utility maximization problem and the Lagrangian function. d) Write the Kuhn Tucker conditions. Here you must pay attention to the non-negativity constraints.
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