Top Posters
Since Sunday
25
j
23
21
j
21
D
21
z
20
i
19
v
19
a
18
a
18
s
18
a
18
New Topic  
wrote...
Posts: 634
A year ago
Suppose Joe's utility for lobster (L) and soda (S) can be represented as U = L0.5 S0.5. Draw the indifference curve that yields a utility level of 9. Calculate the MUL, MUS, and MRS of L for S on that indifference curve when S = 3.
Textbook 

Microeconomics

Edition: 6th
Author:
Read 34 times
1 Reply
And if you call, I will answer
And if you fall, I'll pick you up
And if you court this disaster
I'll point you home
Replies
Answer verified by a subject expert
wrote...
Posts: 403
Rep: 0 0
A year ago
Sign in or Sign up in seconds to unlock everything.
See the above figure. Along that indifference curve, when:
S = 3, L = 27.  MUL = 0.5 * (S/L)0.5 = 1/6.
MUS = 0.5 * (L/S)0.5 = 1.5.
MRS of L for S = - MUS/MUL = -9.
Joe is willing to give up 9 lobsters to get another soda.
1
Related Topics
New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers.
Learn More
Improve Grades
Help Others
Save Time
Accessible 24/7
  128 People Browsing
Related Images
 4007
 817
 2922