Assume Utility function:

u(c,l) = ln(c) + ln (l)

s.t. B.C. : c = wh - wl

where:

c is consumption, l is labor, w is wage rate, h is hours in a day.

a. Form a mathematical formula for the indifference curve and draw it with l on the x-axis and c on the y-axis. Write down the slope of the indifference curve for any (l,c) and explain what it means.

b. Write down the slope of the B.C.

c. Then, maximize the above utility function w.r.t (l,c) s.t. the budget constraint. Compare your answers to (b) and (c).

d. Repeat (a) and (b) with the following new utility function: u(c,l) = c + 3ln(l)