For the Utility Function U(X,Y) = X⁰

question 101

Multiple Choice

For the utility function U(X,Y) = X^0.5Y^0.5, the marginal rate of substitution MRS_XY is:

• A) 0.5Y/X.
• B) 0.5X/Y.
• C) X/Y.
• D) Y/X.

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Definitions:

Demand Curve

A visual diagram that illustrates how the amount of a product that purchasers are ready to buy varies with its price.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied.

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price, where market supply equals market demand.

Agricultural Price Floors

Government-imposed limits on how low prices can fall for agricultural products, aimed at stabilizing farmers' incomes.