\n 3. Consider someone who gets utility from consumption in two periods 1 and 2. Her utility function is U = (c1)^(1\/2) + (?c2)^(1\/2) = ?c1 + ??c2 (a) Suppose ? = 1.
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What is the marginal rate of substitution when c1 = 2 and c2 = 8? What is the level of utility? (b) What is the MRS when c1 = 1\/2 and c2 = 8? (c) Solve for c2 as a
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function of c1 and utility U. This gives the level of c2 which generates utility U for a given c1. (d) Set ? = 1. Plot out two indifference curves. Put c1 on the
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horizontal axis and put c2 on the vertical axis. Consider the indifference curve for U = 10 and U = 12. Find the levels of c2 which give this utility when c1 = 1,
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4, 9, 16 and 25. Plot the two indifference curves.<\/p>\n","protected":false},"excerpt":{"rendered":"
3. Consider someone who gets utility from consumption in two periods 1 and 2. Her utility function is U = (c1)^(1\/2) + (?c2)^(1\/2) = ?c1 + ??c2 (a) Suppose ? = 1. What is the marginal rate of substitution when Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-73729","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/73729","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=73729"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/73729\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=73729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=73729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=73729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}