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Suppose That a Consumer Has Utility Function U=Ax2y2\mathrm { U } = \mathrm { Ax } 2 \mathrm { y } 2

Question 34

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Suppose that a consumer has utility function U=Ax2y2\mathrm { U } = \mathrm { Ax } 2 \mathrm { y } 2 with MUx=2Ay2x\mathrm { MUx } = 2 \mathrm { Ay } 2 \mathrm { x } and MUy=2Ax2y\mathrm { MUy } = 2 \mathrm { Ax } 2 \mathrm { y } . 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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