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Can someone help me with the derivatives and the respective MRS with the questions in the image?

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1 Answer

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  • Anonymous
    2 years ago
    Favorite Answer

    The marginal rate of substitution (MRS) equals the ratio of the marginal utilities with a minus sign.1.

    Can’t read your diagram (blurred) but I think this is what is needed...

    __________________________

    1.

    MU of X₁ = 4

    MU of X₂ = 6

    MRS = -4/6 = -2/3 = -0.667

    __________________________

    2.

    MU of X₁ = a

    MU of X₂ = b

    MRS = -a/b

    __________________________

    3.

    MU of X₁ = 1/X₁

    MU of X₂ = 1

    MRS = -(1/X)/1 = -1/X

    __________________________

    4.

    MU of X₁ = X₂

    MU of X₂ = X₁

    MRS = -X₂/X₁

    __________________________

    5

    MU of X₁ = aX₁ᵃ⁻¹X₂ᵇ

    MU of X₂ = bX₂ᵇ⁻¹X₁ᵃ

    MRS = -(aX₁ᵃ⁻¹X₂ᵇ)/(bX₂ᵇ⁻¹X₁ᵃ)

    We can simplify this because Xⁿ / Xⁿ⁻¹ = X. E,g. 10⁴/10³ = 10

    MRS = -(aX₂)/(bX₁)

    __________________________

    6

    MU of X₁ = aX₁ᵃ⁻¹

    MU of X₂ = bX₂ᵇ⁻¹

    MRS = -(aX₁ᵃ⁻¹)/(bX₂ᵇ⁻¹)

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