Suppose That a Consumer's Utility Function Can Be Written U(X,Y)

question 43

Essay

Suppose that a consumer's utility function can be written U(X,Y) = XY².
a. Use calculus to determine whether this consumer's marginal rate of substitution MRS_XY is increasing or decreasing in X.
b. Is this consumer's marginal rate of substitution MRS_XY is increasing or decreasing in Y?

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Definitions:

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity, including the balance sheet, income statement, and cash flow statement.

GAAP

Generally Accepted Accounting Principles, a common set of accounting rules and standards for financial reporting.

Material Departure

A significant deviation or divergence from expected, customary, or defined standards or practices, often in financial reporting or auditing.

SEC

The Securities and Exchange Commission, a U.S. government agency responsible for regulating the securities markets and protecting investors.