1. Joe Bob has a utility function given by u (x₁, x2) = x² + x3 + 2x1x2. (a) Compute Joe Bob's marginal rate of substitution. (b) Joe Bob's cousin, Al, has a utility function given by v (1,2)= x1 + x2. Compute Al's marginal rate of substitution. (c) Do u (x1, x2) and v(x1,x2) represent the same preferences?

1. Joe Bob has a utility function given by u (x₁, x2) = x² + x3 + 2x1x2. (a) Compute Joe Bob's marginal rate of substitution. (b) Joe Bob's cousin, Al, has a utility function given by v (1,2)= x1 + x2. Compute Al's marginal rate of substitution. (c) Do u (x1, x2) and v(x1,x2) represent the same preferences?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 3WNG

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