Suppose That a Consumer Has Utility Function U= Ax²y² with

question 16

Multiple Choice

Suppose that a consumer has utility function U= Ax²y² with MU_x = 2Ay²x and MU_y = 2Ax²y. Which of the following statements is false?

• A) The marginal utilities are positive.
• B) The marginal rate of substitution is diminishing.
• C) The indifference curves are bowed away from the origin.
• D) The indifference curves are downwards sloping.

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