Paul Has the Utility Function U(q₁,q₂)= Q₁q₂

question 27

Multiple Choice

Paul has the utility function U(q₁,q₂) = q₁q₂.If Paul consumes q₁ = 4 and q₂ = 2 his Marginal Rate of Substitution is

• A) -2.
• B) 1.
• C) -1.
• D) ₋₁/₂.

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Definitions:

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A mutual understanding or arrangement between two or more parties, often formalized by a contract or other legal document.

Majority

The greater part or number; the number greater than half the total.

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Preconceived opinion or bias against an individual or group without sufficient knowledge, thought, or reason.

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An oversimplified and widely held fixed idea or image of a particular type of person or thing, which is often negative and prejudicial.