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What do you understand by the concept of marginal utility

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a) What do you understand by the concept of marginal utility?

b) What do you understand by the concept of a diminishing marginal rate of substitution?

c) If the total utility function of an individual takes the form : U(x,y) = ( + 2) 2 ( + 3) 2 where U is the total utility and x and y are the quantities of the two goods;

(i) Find the marginal utility function of good ''x''

(ii) Find the marginal utility function of good ''y''

(iii) Find the value of the marginal utility of good ''x'' when 4 units of each good are consumed.

(iv)Find the marginal rate of substitution function for the above total utility function.

(v) Is the total utility function above convex or not?

d) The demand function of a good ''x1'' is given by Px1 = 8,000 - 24x1. Using definite integral calculus, find the consumer surplus for the individual when he consumes 100 units of good ''x1''

e) The supply function of a good ''x2'' is given by Px2 = 1,800 + 0.03 ( 2 ) 2 . Using definite integral calculus, find the producer surplus for the producer when he/she sells 50 units of good ''x2''

Reference no: EM132560169

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