Determine the marginal rate of substitution mrs

Reference no: EM13197359

There are two goods 1 and 2. Denote by (x1; x2) the consumption bundle consisting of x1 units of good 1 and x2 units of good 2. A consumer has preferences that described by the linear utility function:
u(x1; x2) = x1 + 2x2:

1. Write down the equation for the indierence curve that passes through the consumption bundle (2; 1).Draw that indierence curve in a diagram with x1 on the horizontal axis and x2 on the vertical axis. In the same diagram, draw the indierence curve along which the consumer's utility is.

2. Determine the marginal rate of substitution (MRS)

Reference no: EM13197359

Questions Cloud

Describe the acting is impressive across the boards : What makes The Dark Knight fairly unique among comic book movies is the focus on acting and storytelling. The acting is impressive across the boards. Bale, Oldman, Ledger, Caine, Morgan Freeman, and Aaron Eckhardt all excel in their roles. Unlike ..

Is there a binding contract to build the road : In 1994, the Dryden Construction Company contracted with the Ontario Hydro Electric Power Commission to build an access road 7 miles long from its Manitou Falls generating station to Provincial Highway No. 105. The contract contained the following..

Describe the term god given freedom of the individual : The evolution of the concept of "God given freedom of the individual" stemming from the Protestant Reformation and developing through the American Enlightenment and the Great Awakening, and culminating with the Declaration of Independence.

What are the pros and cons of egans performance appraisal : What are the pros and cons of Egan's performance appraisal system Do you think it identifies the best employees Do you think it helps develop employees to perform the best they can Can increased sales be linked directly

Determine the marginal rate of substitution mrs : There are two goods 1 and 2. Denote the consumption bundle consisting of x1 units of good 1 and x2 units of good 2.Write down the equation for the indierence curve that passes through the consumption bundle.

What are the no-arbitrage boundary conditions : What are the no-arbitrage boundary conditions for the value of a European vanilla Call option with strike price K1 - boundary conditions for the value of the European vanilla Call option

State the music of the medieval or the renaissance periods : How was the music of the Medieval or the Renaissance periods shaped by its culture. Give examples of music you have heard up to this point in the class.

Explain the four steps of risk assessment : Create an outline of the risk of using Malathion according to the four steps of risk assessment presented in Figure 4.1 of Visualizing Environmental Science.

What was the significance of industrialization : What was industrialization How did industrialization manifest itself in the United States between 1865 and 1900What effect did industrialization have on American social and economic development between 1865 and 1900

User Account

All Pages