Which of the following utility functions would not be consistent with the notion that x and y are both "goods" with positive marginal utilities?
A) $U ( x , y ) = x ^ { 2 } y$ .
B)U(x,y)= x + y .
C) $U ( x , y ) = x \sqrt { y }$ .
D)U(x,y)= x/y .

Question

Quizplus · Accepted Answer

Option D is not consistent with the notion of x and y being "goods" with positive marginal utilities because the marginal utility of x will decrease as x increases while keeping y constant, eventually leading to a negative marginal utility. Hence, the ratio x/y would not always have positive marginal utility.

Which of the Following Utility Functions Would Not Be Consistent U(x,y)=x2yU ( x , y ) = x ^ { 2 } yU(x,y)=x2y

Which of the Following Utility Functions Would Not Be Consistent $U ( x , y ) = x ^ { 2 } y$