A derive the equation for the marginal rate of


Jackie has the following utility function:U(D, W) = D + 2lnW Where D = aerobics DVDs and W = pairs of walking shoes.Jackie has an income of $100, the price of an aerobics DVD (PD) = $20, and the price of a pair of walking shoes (PW) = $20.

(a) Derive the equation for the marginal rate of substitution for this utility function.

(b) Solve for Jackie's optimal consumption bundle.

Solution Preview :

Prepared by a verified Expert
Business Management: A derive the equation for the marginal rate of
Reference No:- TGS01621559

Now Priced at $10 (50% Discount)

Recommended (97%)

Rated (4.9/5)