效用函數型態.pptVIP

We can express the MRS for any basket as a ratio of the marginal utilities of the goods in that basket Suppose the consumer changes the level of consumption of x and y. Using differentials: dU = MUx . dx + MUy . dy Along a particular indifference curve, dU = 0, so: 0 = MUx . dx + MUy . dy Solving for dy/dx: dy = _ MUx dx MUy By definition, MRSx,y is the negative of the slope of the indifference curve: MRSx,y = MUx MUy Diminishing marginal utility implies the indifference curves are convex to the origin (implies averages preferred to extremes) Example: U= (xy)0.5 MU