Charlie's utility function is U(A, B)= AB, where A and B are the numbers of apples and bananas, respectively, that he consumes.When Charlie is consuming 15 apples and 90 bananas, if we put apples on the horizontal axis and bananas on the vertical axis, the slope of his indifference curve at his current consumption is
A)215.
B)-6.
C)-12.
D)-1/6.
E)-1/12.

Question

Quizplus · Accepted Answer

The slope of an indifference curve is given by the marginal rate of substitution (MRS), which is the negative of the ratio of the marginal utilities of the two goods. For Charlie's utility function U(A, B) = AB, the marginal utility of A (MU_A) is B, and the marginal utility of B (MU_B) is A. Thus, MRS = -MU_A/MU_B = -B/A. At A = 15 apples and B = 90 bananas, MRS = -90/15 = -6.

Charlie's Utility Function Is U(A, B)= AB, Where a and B