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Consider the Utility Function u(x1,x2)=x1αx2βu \left( x _ { 1 } , x _ { 2 } \right) = x _ { 1 } ^ { \alpha } x _ { 2 } ^ { \beta }

Question 16

Essay

Consider the utility function u(x1,x2)=x1αx2βu \left( x _ { 1 } , x _ { 2 } \right) = x _ { 1 } ^ { \alpha } x _ { 2 } ^ { \beta } .Which of the following are true statements about the indifference maps represented by this function.
a.
MRS=-1 along the 45 degree line if and only if
α=β\alpha = \beta .
b.
MRS=-1 along a ray steeper than the 45 degree line if and only if
α>β\alpha > \beta .
c.
MRS=-1 along a ray shallower than the 45 degree line if and only if
α<β\alpha < \beta .
d.
All of the above.
e.
None of the above.

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A
When the exponents are equal to one an...

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