Results 1 to 4 of 4

Math Help - Using total differential to find the marginal rate of substitution

  1. #1
    Newbie
    Joined
    Jan 2010
    Posts
    17

    Using total differential to find the marginal rate of substitution

    help please..

    Consider the utility function U(x, y) = xy + y.
    (a) Use the total differential to find the marginal rate of substitution (MRS) between y and x.
    (b) Use the MRS to show that the indifference curves are strictly convex to the origin (i.e.
    show that the MRS is diminishing).
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Newbie
    Joined
    Mar 2010
    Posts
    1

    Econ 2770

    Hello

    I am currently working on this exact same question .. Have you gotten anywhere with it yet?
    Follow Math Help Forum on Facebook and Google+

  3. #3
    Newbie
    Joined
    Jan 2010
    Posts
    17
    unfortunately not..
    I can't really spend any more time on it because i have a stats midterm tomorrow i need to study for.
    hopefully someone helps us out
    Follow Math Help Forum on Facebook and Google+

  4. #4
    Newbie CaesarXXIV's Avatar
    Joined
    Mar 2010
    Posts
    5
    Quote Originally Posted by ihatemath09 View Post
    help please..

    Consider the utility function U(x, y) = xy + y.
    (a) Use the total differential to find the marginal rate of substitution (MRS) between y and x.
    (b) Use the MRS to show that the indifference curves are strictly convex to the origin (i.e.
    show that the MRS is diminishing).
    a)

    dU=Ux*dx+Uy*dy=0
    -Ux/Uy=dy/dx
    Ux/Uy=-dy/dx= y/(x+1)

    b)

    Since
    -dy/dx=y/(x+1)
    dy/dx=-y/(x+1) since y>0, x>0 MRS is always diminishing
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Back calculate total participants from rate ratios
    Posted in the Advanced Statistics Forum
    Replies: 0
    Last Post: September 29th 2010, 12:48 PM
  2. Total Differential to find slope of Curve
    Posted in the Calculus Forum
    Replies: 4
    Last Post: July 29th 2009, 11:23 AM
  3. cost, revenue, marginal and total etc
    Posted in the Business Math Forum
    Replies: 2
    Last Post: May 13th 2009, 02:49 PM
  4. Marginal rate of technical substitution
    Posted in the Business Math Forum
    Replies: 3
    Last Post: August 16th 2007, 05:21 PM
  5. Rate of Total Return (business)
    Posted in the Business Math Forum
    Replies: 2
    Last Post: September 18th 2005, 03:05 PM

Search Tags


/mathhelpforum @mathhelpforum