Suppose that the utility function is equal to U(XY)= 2YX2 . What is the slope of...

Suppose that the utility function is equal to U(XY)= 2YX² . What is the slope of the indifference curve when Y = 5 and X = 2? Assume that good X is on the horizontal axis and good Y is on the vertical axis.

Solutions

Expert Solution

U = 2YX^2

MUy = dU/dY = 2X^2

MUx= dU/dX = 2Y(2X) = 4XY

MRS = MUx/MUy = 4XY/2X^2 = 2Y/X (MRS is the slope of indifference curve)

Put Y = 5 and X = 2 to get:

MRS = 2Y/X = (2*5)/2 = 5

Rahul Sunny answered 1 year ago

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