Question

a) If Maria’s utility function is U = A Xayb what is his marginal utility functions for X and Y? Find the MRS between x and y.

Answer 1

$$MU_x=\frac {\delta U}{\delta x}=Aax^{a-1}y^b$$

$$MU_y=\frac {\delta U}{\delta y}=Abx^{a}y^{b-1}$$

$$MRS_{x,y}=\frac {MU_x}{MU_y}=\frac {y}{x}$$