Order the answer to: Suppose a person has a utility function given by U

Order the answer to: Suppose a person has a…

Question	Suppose a person has a utility function given by U = [x? + y?]1/? where ? is a number between -? and 1. This is called a constant elasticity of substitution (CES) utility function. You will encounter CES functions in Chapter 6, where the concept of elasticity of substitution will be explained. The marginal utilities for this utility function are given by MUx = [x? + y?]1/??1x??1 MUy = [x? + y?]1/??1 y??1 Does this utility function exhibit the property of diminishing MRSx,y?
Subject	business-economics

Question

Suppose a person has a utility function given by U = [x? + y?]1/? where ? is a number between -? and 1. This is called a constant elasticity of substitution (CES) utility function. You will encounter CES functions in Chapter 6, where the concept of elasticity of substitution will be explained. The marginal utilities for this utility function are given by
MUx = [x? + y?]1/??1x??1
MUy = [x? + y?]1/??1 y??1
Does this utility function exhibit the property of diminishing MRSx,y?

Subject

business-economics

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