Judy likes brussels sprouts(x1)and ketchup(x2).Her utility function is given by U(x1,x2) = 2logx1+logx21. Find Judy’s MRS, for an arbitrary bundle(x1,x2).2. Plot Judy’s indifference curve that passes through the bundle(4,4). Find the MRS for thisbundle, and depict it on the graph.3. Is bundle(8,1)on the same indifference curve passing through bundle(4,4)? Which good is "locally more valued" at(8,1): brussels sprouts or ketchup? (Hint: goodxis locallymore valued than goodyat consumption levels(x1,y1)if at these levels of consumption theconsumer is willing to give up more than one unit of goodyin order to receive one more unitof goodx.)
Judy likes brussels sprouts(x1)and ketchup(x2).Her utility function is given by U(x1,x2) = 2logx1+logx21.
Find Judy’s MRS, for an arbitrary bundle(x1,x2).2.
Plot Judy’s indifference curve that passes through the bundle(4,4). Find the MRS for thisbundle, and depict it on the graph.3. Is bundle(8,1)on the same indifference curve passing through bundle(4,4)?
Which good is "locally more valued" at(8,1): brussels sprouts or ketchup? (Hint: goodxis locallymore valued than goodyat consumption levels(x1,y1)if at these levels of consumption theconsumer is willing to give up more than one unit of goodyin order to receive one more unitof goodx.)
The utility function is given as follows:
The marginal rate of substitution is the rate at which the goods are exchanged keeping the utility constant.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
