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Say that an individual’s preferences for consumption a composite of all the goods he likes are expressed in functional form according to

Say that an individual’s preferences for consumption (a composite of all the goods he likes) are expressed in functional form according to: utility= ??(??) = ????^2 + ??C, where C is consumption. a) Are the values of each parameter (“a” and “b”) positive or negative? Base your answer on your intuition about individuals’ preferences and knowledge of algebra (helpful to use a graph). b) What is the individual’s marginal utility? Note: this is the derivative of the utility function with respect to C. c) Is marginal utility positive for all values of C?

Apr 17 2020 View more View Less

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