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Homework Help: Partially increasing a variable

  1. Mar 30, 2008 #1
    1. The problem statement, all variables and given/known data

    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. Relevant 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?
     
  2. jcsd
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