Consider the utility function $\mathrm { U } = 5 \mathrm { x } + 3 \mathrm { y } 2$, which has $\mathrm { MUx } = 5$ and $\mathrm { MUy } = 6 \mathrm { y }$. The indifference curves for this utility function:
A)will have a diminishing marginal rate of substitution of for as x increases.
B)will have a constant marginal rate of substitution of for as x increases.
C)will have an increasing marginal rate of substitution of for as x increases.
D)will be straight lines.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is given by the ratio of the marginal utilities of x and y (MUx/MUy). Since MUx = 5 and MUy = 6y, the MRS, which simplifies to a function not dependent on x, indicates that as x changes, the MRS remains constant, implying that the indifference curves will have a constant slope.

Consider the Utility Function U=5x+3y2\mathrm { U } = 5 \mathrm { x } + 3 \mathrm { y } 2U=5x+3y2

Consider the Utility Function $\mathrm { U } = 5 \mathrm { x } + 3 \mathrm { y } 2$