Clara's Utility Function Is U(X, Y)=(X + 2)(Y + 1)

question 13

Multiple Choice

Clara's utility function is U(X, Y) =(X + 2) (Y + 1) .If Clara's marginal rate of substitution is -6 and she is consuming 8 units of good X, how many units of good Y is she consuming?

• A)59
• B)6
• C)60
• D)14
• E)13

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Definitions:

Average Variable Cost

Average Variable Cost is calculated by dividing the total variable cost (cost that changes with the amount of output) by the quantity of output produced.

Marginal Cost

An incremental expense associated with manufacturing one extra item of a product.

Average Fixed Cost

The total fixed costs divided by the number of units produced, representing how fixed costs dilute with increased production.

Marginal Cost

Marginal cost is the increase or decrease in the total cost that arises when the quantity produced is incremented by one unit.