Question: Economics question Problem 3 Utility Function: U = In (x) + In (z) Budget Constraint: 120 = 2x + 3z (a) Find the optimal values

Economics question Economics question Problem 3 Utility Function: U = In (x) + In

Problem 3 Utility Function: U = In (x) + In (z) Budget Constraint: 120 = 2x + 3z (a) Find the optimal values of x and z (b) Explain in words the idea of a compensating variation for the case where the budget constraint changed to 120 = 2x + 5z

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