# Calculating marginal rate of substitutionWatch

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#1
I'm engaging in some light revision for a Microeconomics test next week and i've stumbled across a question where I have to calculate the MRSxy from MUx and MUy.

I have MUx down as 9y^0.7/ 10x^0.7

and MUy as 21x^0.3/ 10y^0.3

I understand that you have to do MUx/ MUy to find MRSxy but I'm not sure how to do so in this case. Is there an easier way to find MRS? If not, how would I solve MUx/ MUy?

0
5 years ago
#2
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0
5 years ago
#3
You just use fractions:

MRS = MUx/MUy

Another way to find MRS is to differentiate the indifference curve.
0
5 years ago
#4
MRS = MUx/Muy

= 9y^0.7/10x^0.7/21x^.0.3/10y^0.3

Here, it's like 5/1/1/5, algebraically, that is 5*5/1*1, this is algebra, you need to look it up if you don't understand.

So, 9y^0.7*10y^0.3/ 10x^0.7 * 21x^0.3

When multiply powers, e.g x^2 * x^2 = x^4, you add them, so x^0.7*x^0.3 = x^1 or x

Here, it is 90y/210x, as a result.

Simplify = 30y/70x = 3y/7x.

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