Suppose that the utility function U(c, s) = c +2s3 describes Molly's preferences over two goods: Carrots (c) and Spinach (s). For the following, think of Carrots as the good graphed on the horizontal axis. a. Derive an expression for her marginal utility for Carrots (U) and her marginal utility for Spinach (US) b. What is Molly's marginal rate of substitution (MRS)? Give a brief (2 sentences maximum) intuitive description of what MRS represents: if Molly has 8 units of spinach, holding her utility constant, how many units of Spinach would she be willing to give up in order to get one more unit of Carrots? Find the equation for and graph Molly's indifference curve for a utility level of 40. Be sure to specify at least 3 bundles of goods on the indifference curve. d. Which assumption about preferences means that Molly's indifference curve should slope down? Briefly support your answer. C.

Suppose that the utility function U(c, s) = c +2s3 describes Molly's preferences over two goods: Carrots (c) and Spinach (s). For the following, think of Carrots as the good graphed on the horizontal axis. a. Derive an expression for her marginal utility for Carrots (U) and her marginal utility for Spinach (US) b. What is Molly's marginal rate of substitution (MRS)? Give a brief (2 sentences maximum) intuitive description of what MRS represents: if Molly has 8 units of spinach, holding her utility constant, how many units of Spinach would she be willing to give up in order to get one more unit of Carrots? Find the equation for and graph Molly's indifference curve for a utility level of 40. Be sure to specify at least 3 bundles of goods on the indifference curve. d. Which assumption about preferences means that Molly's indifference curve should slope down? Briefly support your answer. C.

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Chapter1: Making Economics Decisions

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Concept explainers

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.

Question

2. Suppose that the utility function U(c, s) = c +2s3 describes Molly's preferences over two goods:
Carrots (c) and Spinach (s). For the following, think of Carrots as the good graphed on the horizontal
axis.
a. Derive an expression for her marginal utility for Carrots (U) and her marginal utility for Spinach
(US)
b. What is Molly's marginal rate of substitution (MRS)? Give a brief (2 sentences maximum) intuitive
description of what MRS represents: if Molly has 8 units of spinach, holding her utility constant,
how many units of Spinach would she be willing to give up in order to get one more unit of
Carrots?
Find the equation for and graph Molly's indifference curve for a utility level of 40. Be sure to
specify at least 3 bundles of goods on the indifference curve.
d. Which assumption about preferences means that Molly's indifference curve should slope down?
Briefly support your answer.
Give another utility function that represents Molly's preferences just as well as the one given
above. Justify your answer by showing that the formula for MRS for your new utility function is
the same as what you found for the original function in part b.
C.
e.

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