Suppose that a consumer has utility function $\mathrm { U } ( \mathrm { x } , \mathrm { y } )$ with $\mathrm { MUx } = 5 \mathrm { y } 2 \mathrm { x }$ and $\mathrm { MUy } = 2 \mathrm { x } 2 \mathrm { y }$. What is the marginal rate of substitution?
A) $10 \mathrm { y } 3 \mathrm { x } 3$
B) $2 \mathrm { x } / 5 \mathrm { y }$
C) $5 y / 2 x$
D) $5 \mathrm { y } 2 \mathrm { x } 2$

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is calculated as the ratio of the marginal utility of x (MUx) to the marginal utility of y (MUy). Given MUx = $5y^2x$ and MUy = $2x^2y$, MRS = MUx / MUy = $(5y^2x) / (2x^2y) = 5y / 2x$.

Suppose That a Consumer Has Utility Function U(x,y)\mathrm { U } ( \mathrm { x } , \mathrm { y } )U(x,y)

Suppose That a Consumer Has Utility Function $\mathrm { U } ( \mathrm { x } , \mathrm { y } )$