1.3. Consider the following utility function for a consumer who consumes two goods, x1 and x2, and answer the questions below: u(x1, 82) = In(x1) + x2 (a) Calculate the marginal rate of substitution (MRS) for this utility function. (b) Does u(x) exhibit strictly monotonic preferences? Explain. (c) Is u(x) a homothetic function or not? Explain. (d) Is u(x) quasi-concave/quasi-convex/neither where x1 # 0? Provide support for your an- swer.
1.3. Consider the following utility function for a consumer who consumes two goods, x1 and x2, and answer the questions below: u(x1, 82) = In(x1) + x2 (a) Calculate the marginal rate of substitution (MRS) for this utility function. (b) Does u(x) exhibit strictly monotonic preferences? Explain. (c) Is u(x) a homothetic function or not? Explain. (d) Is u(x) quasi-concave/quasi-convex/neither where x1 # 0? Provide support for your an- swer.
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.8P
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