Whats the marginal rate of substitution mrs at bundle 14


Problem

Use a commodity space to draw the indifference curves for the following utilityfunction: U(x1, x2) = x1x2. Indicate in which direction the utility is increasing across the indifference curves.

What's the marginal rate of substitution (MRS) at bundle (1,4)? What is the MRS at bundle (4, 1)? Give an example of a bundle where the MRS is -1.

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Econometrics: Whats the marginal rate of substitution mrs at bundle 14
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