Essay
Jane's utility function is given by: U(x, y)= xy2.
i)Is Jane indifferent between bundles (2,1)and (1,2)?
ii)Suppose Jane consumes 3 units of x and 2 units of y. If Jane increases her consumption of x by 1 unit but decreases her consumption of y by 1 unit, will she move to a lower indifference curve?
iii)Calculate the MRS when x = 3 and y = 2. (Calculus required)
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i)No, Jane prefers (1,2)to (2,...View Answer
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