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6. Imagine you have a quasi-linear utility function given be U=x-0.03r²+y. Please show your work on these... or do them in Excel that works too. a. Imagine there is bundle A where x=10 and y=1. What is the value the utility function at bundle A? b. Keep bundle A as it is. What is the MRS as x rises from X=10 to x=20. c. Now find the MRS at point 10,1 using the calculus route (the general rule might be easier). You do need the power rule here! U = r = m* r-1 dri

6. Imagine you have a quasi-linear utility function given be U=x-0.03r²+y. Please show your work on these... or do them in Excel that works too. a. Imagine there is bundle A where x=10 and y=1. What is the value the utility function at bundle A? b. Keep bundle A as it is. What is the MRS as x rises from X=10 to x=20. c. Now find the MRS at point 10,1 using the calculus route (the general rule might be easier). You do need the power rule here! U = r = m* r-1 dri

Microeconomic Theory
Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter6: Demand Relationships Among Goods
Section: Chapter Questions
Problem 6.10P
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6. Imagine you have a quasi-linear utility function given be U=x-0.03.x²+y. Please show your work on these.. or do them in Excel that works to0. a. Imagine there is bundle A where x=10 and y=1. What is the value the utility function at bundle A? b. Keep bundle A as it is. What is the MRS as x rises from X=10 to x=20. c. Now find the MRS at point 10,1 using the calculus route (the general rule might be easier). You do need the power rule here! U = x dU dri m = m * xm-1 d. Why do the 2 methods of determining the MRS yield different answers? Is one way better or more accurate than the other? Explain your answer.
Transcribed Image Text:6. Imagine you have a quasi-linear utility function given be U=x-0.03.x²+y. Please show your work on these.. or do them in Excel that works to0. a. Imagine there is bundle A where x=10 and y=1. What is the value the utility function at bundle A? b. Keep bundle A as it is. What is the MRS as x rises from X=10 to x=20. c. Now find the MRS at point 10,1 using the calculus route (the general rule might be easier). You do need the power rule here! U = x dU dri m = m * xm-1 d. Why do the 2 methods of determining the MRS yield different answers? Is one way better or more accurate than the other? Explain your answer.
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