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Find the marginal rate of substitution between x and y

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Question: a. An indifference curve that is concave to the origin has a diminishing marginal rate of substitution. Find the marginal rate of substitution between x and y for the following utility functions

  1. Cobb Douglass: U = (Ax ^a) (y^b )
  2. Constant Elasticity of Substitution: U = A ( (ax^p )+ (1-a) y^p)^1/p
  3. Linear: U= ax + by

b.Demonstrate mathematically whether and y exhibit diminishing marginal utility in each of the utility functions above

c. Explain how you would determine whether each utility function above exhibits diminishing marginal rate of substitution. Include in your answer an explanation of diminishing marginal rate of substitution.

Reference no: EM132284636

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