Consider the utility function uxy x25y75a is this an, Ask an Expert

Economics

Consider the utility function U(X,Y)= X^.25Y^.75.

(a) Is this an assumption that more is better for both goods?

(b) What is the marginal utility of X? Does the marginal utility of X diminish, remain constant,or increase as the consumer buys more X?

(c) What is the marginal utility of Y? Does the marginal utility of Y diminish, remain constant,or increase as the consumer buys more Y?

(d) What is the MRS_X,Y?

(e) Is MRS_X,Y diminidhing, constant, or increasing as the constant substitues X for Y along an indifference curve?

(f) On a graph with X on the horizontal axis and Y on the vertical axis, draw a typical indifference curve(it need not be to scale, but it needs to reflect accurately wheter there is a diminishing MRS_X,Y). Also, indicate on your graph wheter the indifference curve will intersect either or both axes. Label the curve U₁.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92234445

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