Henrietta's utility function is U(x 1 , x 2 )  x 1 x 2 .She has diminishing marginal rate of substitution between goods 1 and 2.

Question

Henrietta's utility function is U(x 1 , x 2 )   x 1 x 2 .She has diminishing marginal rate of substitution between goods 1 and 2.

bailey rivera · Accepted Answer

Final Answer : True, Explanation :  Diminishing marginal rate of substitution means that as an individual consumes more of one good, they are willing to give up less and less of the other good in order to maintain the same level of utility. This concept indicates that the individual has a concave utility function, which is a characteristic of Henrietta's utility function in this scenario.

Henrietta's utility function is U(x₁, x₂) x₁x₂.She has diminishing marginal rate of substitution between goods 1 and 2.

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Henrietta's utility function is U(x1, x2) x1x2.She has diminishing marginal rate of substitution between goods 1 and 2.

Definitions

Learning Objectives

Learning Objectives

Related questions

Henrietta's utility function is U(x₁, x₂) x₁x₂.She has diminishing marginal rate of substitution between goods 1 and 2.