Tiffanys utility function is given by the formula Ux1 x2 mi

Tiffany’s utility function is given by the formula U(x1, x2) = min{2x1, 800x2}. If x1 = x2, which commodity will have a greater marginal utility?

It is not possible to determine which commodity has higher marginal utility

Both x1 and x2 have the same marginal utility

x2

x1

Solution

It is not possible to determine which commodity has higher marginal utility.