Derive the equation for the marginal rate of substitution

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Reference no: EM131244605

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 walkingshoes (Pw) = $20.

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

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

Reference no: EM131244605

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