Compute the MRS for the Following Utility Functions

question 5

Essay

Compute the MRS for the following utility functions:
a.U(X,Y)= aln(X)+ bln(Y),
b.U(X,Y)= X^aY^b,and
c.U(X,Y)= aX + bY,
where a and b are strictly positive constants.

---

Definitions:

Opportunity Costs

The financial impact of skipping the immediate next favorable choice in the process of making a decision.

Net Profit Margin

A financial ratio representing the percentage of revenue that remains as profit after all expenses have been deducted.

Performance Measure

Metrics or indicators used to assess, compare, and track the performance or efficiency of different aspects of an organization.

Financial

This term relates to matters associated with finance, including investments, assets, liabilities, and the management of money.