Suppose maryrsquos utility function for two goods x and y, Ask an Expert

Economics

Suppose Mary’s utility function for two goods X and Y is given by: U(X,Y) = 3X1/2 Y1/2

In Addition, Suppose consumption bundle A consists of 10 units of X and 10 units of Y, and consumption bundle B consists of 20 units of X and 5 units of Y.

Does consumption bundle “A” lie on a higher/lower/same indifference curve than consumption bundle “B”? Show computations and graph.

Compute Mary’s Marginal Rate of Substitution for X and Y at consumption bundle A. What does this number tell you? Show using computations and graph.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91298362

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