QUESTION 3 Consider an individual who has a utility function U(X,Y) = 2x1/2)+ y(/2), the prices of goods X and Y are given by pX = $8 and pY = $2, and the income level of consumer is I= $80.

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Marginal Rate of Technical Substitution

MRTS reaches a manufacturer when a part of the product is lowered to sustain the manufacturing level when the other part is extended. It is the level of the quantity that is lowered when one extra volume is used, and the output is unchanged.

Preferences and Utility Analysis

Before understanding what is preference and utility analysis, it is very important to understand the terms preference and utility separately.