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Unformatted text preview: y = U 2. x 5 10 15 20 25 5 10 15 20 25 30 35 X Y U 2 U 1 f) The slope of a typical indifference curve at some basket ) , ( y x is the , 1 x y MRS x = . At 4 = x , , 1 0.5 4 x y MRS = = . Note that this holds regardless of the value of y . Therefore, the slope of any indifference curve at 4 = x will be 0.5. Problem 3.21 By definition, the expression for MRS x,y is ( 29 x y y x y x MU MU MRS y x y x 1 == =1 1 1 , Moreover, we know that MRS x,y = 4 when x = 4 and y = 8, therefore we can solve for : 3 2 2 2 1 2 4 8 1 4 = ===...
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 Fall '07
 EVANS,T.

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