Homework Answers
Q10) U(x1 , x2 , x3, x4) = x12x2 + x32x4
At (x1,x2,x3,x4) = (1,2,1,4) = 1*2 + 1*4 = 6
Q11)
U = x1*x2
MRS = Marginal Rate of Substituion = -MUx1/MUx2 = -(dU/dx1)/(dU/dx2) = -x2/x1
At (x1,x2) = (4,20)
MRS(4,20) = -20/4 = -5
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how
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indifference curve ?
c) for each utility function show weather the function exhibits
the diminishing rate of substitution property
d) do the above utility function represent the same preference
ordering? why or why not?
c) Suppose the price of beer doubles, but the price of pizza and Tom's income stay the same. How much beer is Tom consuming as a percentage...
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