Asked by
Collin Richard
on Dec 01, 2024Verified
Clara's utility function is U(X, Y) =(X + 2) (Y + 1) .If Clara's marginal rate of substitution is -6 and she is consuming 8 units of good X, how many units of good Y is she consuming?
A) 59
B) 6
C) 60
D) 14
E) 13
Utility Function
A mathematical expression that represents how different combinations of goods or services create levels of happiness or satisfaction for an individual or entity.
Marginal Rate of Substitution
The rate at which a consumer is able to sacrifice a certain amount of one product for another while keeping their level of satisfaction unchanged.
Good X
A term used to represent an unspecified product or commodity in economic models and analyses.
- Comprehend and compute the marginal rate of substitution (MRS), along with its influence on choices related to consumption.
Verified Answer
TB
Learning Objectives
- Comprehend and compute the marginal rate of substitution (MRS), along with its influence on choices related to consumption.