%3D Ollie's utility function for Apples (A) and Bananas (B) is Cobb-Douglas: U = AB/6 a. Find expressions for Ollie 's marginal utilities and his marginal rate of substitution between B and A. MUA = MUB = MRSBA = b. In the tables, show the market baskets yielding utility of U = 1, 4, 9, and 16. c. GRAPH the indifference curves for U = 1, U = 2, U = 3, and U = 4. %3D
%3D Ollie's utility function for Apples (A) and Bananas (B) is Cobb-Douglas: U = AB/6 a. Find expressions for Ollie 's marginal utilities and his marginal rate of substitution between B and A. MUA = MUB = MRSBA = b. In the tables, show the market baskets yielding utility of U = 1, 4, 9, and 16. c. GRAPH the indifference curves for U = 1, U = 2, U = 3, and U = 4. %3D
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.13P
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Question
Im confused on how to get MRS and then graph indifference curves
Transcribed Image Text:PX = 10
X=30
A04
B) Me
Lex= 20
1306
4. I-C, P-C, AND ELASTICITY
Ollie's utility function for Apples (A) and Bananas (B) is Cobb-Douglas: U = AB/6
a. Find expressions for Ollie 's marginal utilities and his marginal rate of substitution
between B and A.
MUA =
MUB =
MRSBA =
b. In the tables, show the market baskets yielding utility of U = 1, 4, 9, and 16.
c. GRAPH the indifference curves for U = 1, U = 2, U = 3, and U = 4.
U = 1
U = 4
U = 9
U = 16
AB =
AB =
AB =
AB =
A
B
A
B
A
B
A
В
1
2
3
6.
3
6.
12
3
4
9.
16
6
6.
18
24
8
12
d. Assume that PA = 2 and PB = 3.
Using incomes of M = 12, 24, 36, and 48, find budget equations, GRAPH budget
lines, and GRAPH Ollie 's Income-Consumption curve for Apples.
e. Assume that Ps = 3 and Cartman's income is M = 36.
Using prices of PA = 18, 9, 6, and 4.5, find budget equations, GRAPH budget
lines, and GRAPH OIlie's Price-Consumption curve for Apples,
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