Marginal rate of substitution

Running head: DECISION-MAKING IN AGRIBUSINESS 1 DECISION-MAKING IN AGRIBUSINESS 8 Decision-Making in Agribusiness: Quantitative Applications (AGSC5300) Name Institution Decision-Making in Agribusiness: Quantitative Applications (AGSC5300) Problem 1 To differentiate the function, Y=?lnX?, the chain rule is applied. Fundamentally, the rule states that, for a function of the form Y=f(f(X)) the derivative is computed as follows: First, let f(X) be a value, say U. The function may therefore be written as Y=f(U) Then, the function is differentiated with respect to U That is, Next, the derivative of U with respect to X is calculated That is, Combining the above two derivatives gives the chain rule: =* Applying the above rule, let X? be U Therefore, Y=?lnU.