Answer to Question #155882 in Macroeconomics for mutale chandalala

Question

Given the utility function, U=∂x+ßy, determine the marginal rate of substitution

Answer 1

Answer:

The given utility function

U = ∂x+βy

We know that marginal rate is given by 

$dy \over dx$= $Ux \over Uy$

U_x = $∂U \over ∂x$  = ∂*1+0= ∂

U_y = $∂U \over ∂y$ = 0 + β×1= β

the marginal rate = $∂ \over β$