Do the utility function exhibit diminishing marginal utility

Assignment Help Econometrics

Reference no: EM13208875

Consider the following utility functions:
U(x, y) = xy
U(x,y) = 3x + 6y
U(x,y) = 20x1/2+ 2y

a. Fixing y at 4, what is the marginal utility of X when x is 10, 20, and 30 for each utility function?

b. Do these utility functions exhibit diminishing marginal utility of X? Explain.

c. For each utility function, calculate the marginal rate of substitution of good X for good Y (i.e. -marginal value of X, measured in units of good Y) associated with the bundle (x, y) = (10, 4).

d. Do these utility functions exhibit diminishing marginal rates of substitution? Explain.

Reference no: EM13208875

Questions Cloud

What would have to happen to the nominal wage rate : According to classical macroeconomic theory, monetary policy shocks are "neutral." Explain what this means. Based on that theory, how would a 5% increase in a nation's money supply affect its real wage rate (W/P), all else equal

How many ways are there to perform this division : You're in charge of organizing a workshop for supervillains, and you have to divide up 16 people into two equal-sized groups for a team building exercise.

Why is the optimal bundle usually a corner solution : What does it mean for two goods to be "perfect substitutes" for each other for a consumer Why is the optimal bundle usually a corner solution when a consumer is choosing a bundle of perfect substitutes

Write a program that prompts the user for an integer value : write a program that prompts the user for an integer value for a length of a youtube clip in seconds then display the number of hours , minutes and seconds within the given length.

Do the utility function exhibit diminishing marginal utility : Do these utility functions exhibit diminishing marginal utility of X Explain. For each utility function, calculate the marginal rate of substitution of good X for good Y (i.e. -marginal value of X, measured in units of good Y) associated with the bun..

How many different types of sundaes can be ordered : If a sundae is allowed to have three scoops of ice cream where each scoop must be a different flavor (order of scoops doesn't matter), and either a syrup or a topping (but not both) are required, how many different types of sundaes can be ordered?

Provide a proof or a counterexample : We showed that since the problem concerning a machine halting on its own index is unsolvable, the general halting problem for Turing machines is unsolvable. Does this imply that any superset of an unsolvable problem is unsolvable? Provide a proof ..

Write a program that prompts the user for an integer value : write a program that prompts the user for an integer value for a length of a youtube clip in seconds then display the number of hours

What is the best affordable bundle for jane : Jane receives utility from days spent traveling domestically (d) and days spend traveling in foreign countries (f). Her utility function is U(d, f) = 10df. She has $4000 per year to spend on travel. It costs $100 to spend a day traveling domestical..

User Account

All Pages