Create a numerical example to find the derivative of a function of a set of equations (more than one variable). Use partial differentiation. Explain why taking partial derivatives is important and what it means to microeconomics.

Create a numerical example to find the derivative of a function of a set of equations (more than one variable). Use partial differentiation. Explain why taking partial derivatives is important and what it means to microeconomics.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Building Theories To Explain Eveday Life: From Observations To Questions To Theories To Predictions

Section: Chapter Questions

Problem 1WNG

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Study of decisions made by households and business firms at an individual level. It includes several laws and theorems related to demand, supply, production, allocation of resources, and prices.

Expert Solution

Step 1

An example of a function could be

U(x,y)= x²+y²

Where U(x,y) is the utility function and x and y are two goods from which the consumer derives the utility.

Partial differential with respect to x is given as

$\frac{\partial U (x, y)}{\partial x}$ = 2x

$\frac{\partial U (x, y)}{\partial y}$ = 2y

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