Consider the Utility Function U = 5x +3y², Which Has $M R S_{x, y}$

question 24

Multiple Choice

Consider the utility function U = 5x +3y², which has MU_x = 5 and MU_y = 6y. The indifference curves for this utility function

• A) will be straight lines.
• B) will have the same \( M R S_{x, y} \) as y increases holding x constant.
• C) will have the same \( M R S_{x, y} \) as x increases holding y constant.
• D) will have a diminishing marginal rate of substitution as the consumer substitutes x for y .

Recognize the inefficiencies caused by binding price ceilings and their rationing mechanisms.

Comprehend the historical context and the impact of price ceilings, using the 1973 gasoline shortage as an example.

Identify the consequences of imposing binding price ceilings in competitive markets.

Analyze the role of rent control as a form of price ceiling and its intended goals.

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Definitions:

Budget Constraint

The limitations on the consumption bundles that a consumer can afford based on their income and the prices of goods and services.

Units Of B

A measurement term referring to the quantity of substance B, often used in contexts where B represents a specific variable or entity.

Units Of A

A measure of quantity for a specific or undefined item, referred to as 'A'.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford based on the consumer's income and the prices of goods and services.