Compute marginal utilities and marginal rate of substitution for each of the utility functions given below. In each case. explain whether the assumptions of diminishing marginal utility and diminishing marginal rate of substitution are satisfied or not. a) U(X,Y) = 2X-Yy: %3D b) U(X,Y) = XY + 3X + SY c) U(X,Y) = (0.3X +0.7Y") d) U(X,Y) = In (5VX + 2VY) %3D

Compute marginal utilities and marginal rate of substitution for each of the utility functions given below. In each case. explain whether the assumptions of diminishing marginal utility and diminishing marginal rate of substitution are satisfied or not. a) U(X,Y) = 2X-Yy: %3D b) U(X,Y) = XY + 3X + SY c) U(X,Y) = (0.3X +0.7Y") d) U(X,Y) = In (5VX + 2VY) %3D

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 1WNG

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

Compute marginal utilities and marginal rate of substitution for each of the utility
functions given below. In cach case. explain whether the assumptions of
diminishing marginal utility and diminishing marginal rate of substitution are
satisfied or not.
a) U(X,Y)= 2x-yi
b) U(X,Y) = XY +3X + 5Y
c) U(X,Y) = (0.3X + 0.7Y")
d) U(X,Y) = In (5VX + 2VT)
%3D
%3D
%3D

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