Suppose for a Utility Function That the Marginal Utility for Good

question 26

Multiple Choice

Suppose for a utility function that the marginal utility for good x is given by MU_x = 5y²/x

• A) The more is better assumption is not satisfied for x in this utility function.
• B) The more is better assumption is satisfied for x in this utility function.
• C) This shows a positive and increasing marginal utility of x.
• D) The marginal rate of substitution must be diminishing.

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