Suppose an individual has a utility function given by . We can say that this function displays
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4 marks, −1MicroeconomicsConsumer preferences and utilityMarginal rate of substitution and convexityEasyabout 1 min
CUET-PG 2024 Question 10: Consumer preferences and utility
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Suppose an individual has a utility function given by U(x,y) = 2x + 3y. We can say that this function displays (A) Diminishing marginal rate of substitution (B) Increasing marginal rate of substitution (C) Constant marginal rate of substitution (D) Zero marginal rate of substitution
Consumer preferences and utility has come up 93 times in 7 exams since 2007.
What this question tests
This question is on Marginal rate of substitution and convexity, part of Consumer preferences and utility in Microeconomics.
The rate at which a consumer trades one good for another, and why it diminishes along a convex indifference curve.
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