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Consider the utility function

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Consider the utility function U(X,Y)= X.25Y.75.

(a) Is this an assumption that more is better for both goods?

(b) What is the marginal utility of X? Does the marginal utility of X diminish, remain constant,or increase as the consumer buys more X?

(c) What is the marginal utility of Y? Does the marginal utility of Y diminish, remain constant,or increase as the consumer buys more Y?

(d) What is the MRSX,Y?

(e) Is MRSX,Y diminidhing, constant, or increasing as the constant substitues X for Y along an indifference curve?

(f) On a graph with X on the horizontal axis and Y on the vertical axis, draw a typical indifference curve(it need not be to scale, but it needs to reflect accurately wheter there is a diminishing MRSX,Y). Also, indicate on your graph wheter the indifference curve will intersect either or both axes. Label the curve U1.

Reference no: EM131424665

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