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SuF iYaN Ansari
on Oct 14, 2024

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Clara's utility function is U(X, Y)  (X  2) (Y  1) .If Clara's marginal rate of substitution is 5 and she is consuming 15 units of good X, how many units of good Y is she consuming?

A) 5
B) 85
C) 20
D) 84
E) 11

Utility Function

A mathematical representation of how a consumer ranks different bundles of goods according to the levels of satisfaction they provide.

Marginal Rate of Substitution

The rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility.

Good X

A placeholder term that can refer to any commodity or product under consideration in an economic model or context.

  • Ascertain and perform calculations concerning the marginal rate of substitution (MRS) to appreciate its impact on consuming behaviors.
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Bailey AdkinsOct 18, 2024
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