MICRO- utility

[Anjali]

[Anjali]

Ua= x^2 y^3

Ub= x^1/2 y^1/3

[Akshay Jain]

Its false....A' utility fn is a monotonic transformation of B's utility fn...so they both give same ICs

[jack]

 I think
option A

[jack]

sorry ans is C, by mistake i typed a
answer is c because MRS(A)<MRS(B)

[Anjali]

No jack , MRS is same.
Akshay , could you identify the procedure of monotonic transformation here ?
And in the case of MT , does MRS also remain same ?

[The Villain]

Find Mrs of both the fns...it comes out to be same ir (3y/2x).
And in mobtonic transformations mrs is same which means same satisfction.Hence ans is false.

[Akshay Jain]

Yes in monotonic trans... MRS remains the same.....
if u raise the power of B's utility by 6 then u get A's utility function.....the order of preferences remains same in monotonic trns

[Anjali]

Thanks a lot ron and Akshay !

[SoniaKapoor]

Thanx Akshay :)
Thanx ron:)