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Consider the utility function U(x, y) = xy + x, with MUx = y+1 and MUy = x. (Verify these.) a. is the assumption of "more is better" (non-satiation) satisfied for both goods x and y? b. does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x? Explain. C. what is MRSX,y?

Consider the utility function U(x, y) = xy + x, with MUx = y+1 and MUy = x. (Verify these.) a. is the assumption of "more is better" (non-satiation) satisfied for both goods x and y? b. does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x? Explain. C. what is MRSX,y?

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Consider the utility function U(x, y) = xy+ x, with MUx = y+1 and MUy = x. (Verify these.) a. is the assumption of "more is better" (non-satiation) satisfied for both goods x and y? b. does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x? Explain. c. what is MRSX, y? d. is MRSX,y diminishing, constant, or increasing as the consumer substitutes x for y along an indifference curve? e. on a graph with x on the horizontal axis and y on the vertical axis, draw a typical indifference curve (not necessarily exactly to scale, but should reflect whether MRS×,y is diminishing or not). Label the curve as U1. f. on the same graph, draw a second indifference curve U2, where U2 > U1
Transcribed Image Text:Consider the utility function U(x, y) = xy+ x, with MUx = y+1 and MUy = x. (Verify these.) a. is the assumption of "more is better" (non-satiation) satisfied for both goods x and y? b. does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x? Explain. c. what is MRSX, y? d. is MRSX,y diminishing, constant, or increasing as the consumer substitutes x for y along an indifference curve? e. on a graph with x on the horizontal axis and y on the vertical axis, draw a typical indifference curve (not necessarily exactly to scale, but should reflect whether MRS×,y is diminishing or not). Label the curve as U1. f. on the same graph, draw a second indifference curve U2, where U2 > U1
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