a) Are the preferences represented by the above utility function monotonic? b) Graph a representative indifference curve. c) Compute MRS. Do these preferences exhibit decreasing MRS?
a) Are the preferences represented by the above utility function monotonic? b) Graph a representative indifference curve. c) Compute MRS. Do these preferences exhibit decreasing MRS?
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.1P
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Question
1- Consider the following utility function for goods x1 and x2:
u(x1,x2)=(x1+x2)2
a) Are the preferences represented by the above utility function monotonic?
b) Graph a representative indifference curve.
c) Compute MRS. Do these preferences exhibit decreasing MRS?
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