Answer to Question #141847 in Microeconomics for Ankit

Question

Find the utility functions for each of the following cases. Find

the marginal rate of substitution and finally draw the indifference curves.

Label everything.

a. For Adam 1 lecture on human anatomy (x axis) in his Biology class can be

perfectly replaced by 3 YouTube videos on human anatomy (y axis).

b. Robert loves to go on vacation but he goes for it only when he gets 5 paid

leaves for each vacation. Consider vacation on x axis and paid leaves on y

axis.

Answer 1

a. If for Adam 1 lecture on human anatomy (x axis) in his Biology class can be

perfectly replaced by 3 YouTube videos on human anatomy (y axis), then the utility function is $U(x,y) = x^{2/3}y^{1/3}.$

The indifference curve is downward-sloping.

b. If Robert loves to go on vacation but he goes for it only when he gets 5 paid

leaves for each vacation, and if vacation is on x axis and paid leaves on y

axis, then the utility function is $U(x,y) = x^{4/5}y^{1/5}.$

The indifference curve is downward-sloping.