Jezz has the quasi log-linear utility function
U(q₁,q₂)= q₁ + 2ln(q₂)
Jezz has an income of $100 and faces prices p₁ = p₂ = 20.
a.What is the marginal rate of substitution for this utility function?
b.Solve for Jezz's optimal bundle.
c.Suppose Jezz's income falls to $20.What will happen to his optimal bundle?
Is the MRS = MRT at the optimal bundle?

Question

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The Answer of Jezz has the quasi log-linear utility function U(q₁,q₂)= q₁ + 2ln(q₂) Jezz has an income of $100 and faces prices p₁ = p₂ = 20. a.What is the marginal rate of substitution for this utility function? b.Solve for Jezz's optimal bundle. c.Suppose Jezz's income falls to $20.What will happen to his optimal bundle? Is the MRS = MRT at the optimal bundle?

Jezz Has the Quasi Log-Linear Utility Function