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Consider the following utility function, which specifies Carina’s preferences over two goods, donuts (D) and brownies (B). (Please note that we call this type of utility function quasi-linear.) U(D, B) = 3D + 2Bˆ 2 (a) (10) Plot an indifference curve map for this utility function (with donuts on the horizontal axis and brownies on the vertical one). Include the indifference curves described by U = 5 and U = 10. Label the bundles with B = 1 on each. (b) (5) What is the marginal utility of D? What is the marginal utility of B? (c) (5) What is the slope of the U5 indifference curve at B = 1 ? (d) (5) What happens to the slope of the indifference curve as we move from U5 to U10 at B = 1? (e) (5) What happens to the slope of the indifference curve as we move from U5 to U10 at D = 1?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91707373

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