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Microeconomics 2nd Edition by Douglas Bernheim
Edition 2ISBN: 978-0071287616Microeconomics 2nd Edition by Douglas Bernheim
Edition 2ISBN: 978-0071287616 Exercise 5
Consider the utility function U ( X , Y ) = a × ln( X ) + b × ln( Y ) where ln indicates the natural logarithm.
a. Calculate MU X , MU Y , and MRS XY.
b. Compare the formula for MRS XY to the corresponding formula for Cobb-Douglas utility. How do the indifference curves for these two types of utility functions compare In what way (if any) do they represent different preferences
a. Calculate MU X , MU Y , and MRS XY.
b. Compare the formula for MRS XY to the corresponding formula for Cobb-Douglas utility. How do the indifference curves for these two types of utility functions compare In what way (if any) do they represent different preferences
Explanation
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Microeconomics 2nd Edition by Douglas Bernheim
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