2. Suppose John's utility function is UX,Y) = 4/XY , where X is consumption of beer and Y is consumption of pizza. For this utility function, ( Calculus Kahuna say: MUx = 2\Y/X and MUy = 2\X/Y ) a) What happens to the marginal rate of substitution between X and Y as consumption of X increases?

Microeconomics
13th Edition
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics
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2. Suppose John's utility function is UX,Y) = 4VXY , where X is consumption of beer and
Y is consumption of pizza. For this utility function,
( Calculus Kahuna say: MUx = 2VY/X and MUy = 2\X/Y )
a) What happens to the marginal rate of substitution between X and Y as
consumption of X increases?
Transcribed Image Text:2. Suppose John's utility function is UX,Y) = 4VXY , where X is consumption of beer and Y is consumption of pizza. For this utility function, ( Calculus Kahuna say: MUx = 2VY/X and MUy = 2\X/Y ) a) What happens to the marginal rate of substitution between X and Y as consumption of X increases?
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