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What is the marginal rate of substitution for U(x,y) = ãxy? ,ã(x+y)?
16 years ago

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J
Aargh font didn't come out right. I meant MRS of U(x,y) = (xy)^0.5 (ie sqaure root of xy) and (x+y)^0.5.
16 years ago
economyst
Use basic calculus. MUx = .5y^.5/x^.5
MUy = .5x^.5/y^.5
MRS = MUx/MUy = y/x

take it from here
16 years ago

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