Teddy has preferences given by the utility function U(K,L) = 2L + K where K = pounds of Kale per month and L = pounds of lettuce per month
What is Teddy's Marginal Utility of Kale? What is Teddy's Marginal Utility from Lettuce? If Kale is on the horizontal axis, what is Teddy's marginal Rate of Substitution?
The marginal utility of Kale is the partial derivative of the utility function with respect to K: MUK = 1. For lettuce, the marginal utility is MUL = 2. The marginal rate of substitution is the ratio of marginal utilities: MRS = -MUK/MUL= -1/2.
Economics
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