Determine the monotonicity and convexity of these preferences and briefly define what they mean. Calculate and interpret the marginal rate of substitution (MRS(x1,x2)) between the two goods for this consumer at the bundle(x1, x2)=(2,1).

Microeconomic Theory
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ISBN:9781337517942
Author:NICHOLSON
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Chapter4: Utility Maximization And Choice
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Determine the monotonicity and convexity of these preferences and briefly define what they mean. Calculate and interpret the marginal rate of substitution (MRS(x1,x2)) between the two goods for this consumer at the bundle(x1, x2)=(2,1).

 

A consumer's preferences over bundles of two goods (x1, X2) are represented by the utility
function v(x1,x2) = In x, + In x2. The income he allocates to the consumption of these
two goods is m > 0. The prices of the two goods are p, and p2, respectively.
Transcribed Image Text:A consumer's preferences over bundles of two goods (x1, X2) are represented by the utility function v(x1,x2) = In x, + In x2. The income he allocates to the consumption of these two goods is m > 0. The prices of the two goods are p, and p2, respectively.
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