PROBLEM (2) A consumer has preferences over bundles of apples (x) and oranges (y) represented by the utility function U(x, y) = Vx – 1/y (a) Does she always prefer more oranges to less? (b) Does she exhibit diminishing marginal utility for apples? (c) Does she exhibit diminishing MRS (of apples for oranges)?

PROBLEM (2) A consumer has preferences over bundles of apples (x) and oranges (y) represented by the utility function U(x, y) = Vx – 1/y (a) Does she always prefer more oranges to less? (b) Does she exhibit diminishing marginal utility for apples? (c) Does she exhibit diminishing MRS (of apples for oranges)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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