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0 10 20 30 40 50 X Indifference curve A
c. Do Raj's preferences satisfy the MoreIsBetter Principle?
Yes Explanation: a. See table above. b. To obtain the formula for Raj's indifference curve, divide both sides with X to isolate Y: Y = U(X,Y)/X. The
utility function U(X,Y) = XY is an example of a CobbDouglas utility function which is convex to the origin as
seen in curve A. c. As seen in the table above, Raj's preferences satisfy the MoreIsBetter Principle because as long as X (or
Y) goes up without a corresponding change in Y (or X), his utility goes up. http://e z to.mhe c loud.mc gr a w- hill.c om/hm.tpx? todo= pr intvie wSingle 7/7...
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- Fall '13