Calculate the marginal rate of substitution (MRS12) for the following utility function: U(91,92) (1491 +692)³. What is the value of MRS12 at bundle (4, 8)? Please round your answer to two decimal places if necessary.

Calculate the marginal rate of substitution (MRS12) for the following utility function: U(91,92) (1491 +692)³. What is the value of MRS12 at bundle (4, 8)? Please round your answer to two decimal places if necessary.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 1SQP

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

Calculate the marginal rate of substitution (MRS12) for the following utility function:
U(91, 92) (1491 +692)³.
What is the value of MRS12 at bundle (4, 8)?
Please round your answer to two decimal places if necessary.

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