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Partially increasing a variable

  • Thread starter brollysan
  • Start date
27
0
1. Homework Statement

Given the utility function u(x1,x2)= (x1)^a + (x2)^a where 0<a<1

Find the marginal substitution rate

Find the change in the marginal substitution rate when x2 is partially increased.

2. Homework Equations

Marginal rate of substitution: dx2/dx1= -(du(x1,x2)/dx1)/(du(x1,x2)/dx2


3. The Attempt at a Solution

By partially derivating i get that the marginal rate of substituion (MRS) is -(ax1^(a-1))/ax2^(a-1)

When x2 is partially increased, does it simply mean i add a constant to x2?
 

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