Question

question 5
2 pts
a consumer consumes goods x and y. at a consumers current consumption bundle, mux = 6.3 utils/unit, muy = 5.7 utils/unit. find the marginal rate of substitution of x for y. in other words, for the consumer, a unit of good x is just as good as ____ units of good y.

• hints/example

Explanation:

Step1: Recall the formula for MRS

The marginal rate of substitution of X for Y ($MRS_{XY}$) is given by the ratio of the marginal utility of X ($MU_X$) to the marginal utility of Y ($MU_Y$), i.e., $MRS_{XY}=\frac{MU_X}{MU_Y}$.

Step2: Substitute the given values

We are given that $MU_X = 6.3$ utils/unit and $MU_Y=5.7$ utils/unit. So, $MRS_{XY}=\frac{6.3}{5.7}$.

Step3: Simplify the ratio

$MRS_{XY}=\frac{6.3}{5.7}=\frac{63}{57}=\frac{21}{19}\approx1.11$.

Answer:

$1.11$