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[Solution Library] Suppose a consumer has preferences over two goods that can be represented by the utility function U=7 X Y, with M U_X=7 Y and M U_Y=7 X. Is the

Question: Suppose a consumer has preferences over two goods that can be represented by the utility function \(U=7 X Y\), with \(M U_{X}=7 Y\) and \(M U_{Y}=7 X\).

  1. Is the assumption that "more is better" satisfied for both goods?
  2. Does the marginal utility of \(X\) diminish, remain constant, or increase as the consumer buys more \(X\) ? Explain.

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