Suppose that the utility function is
u(c, l) = log(c) — l
(a) Explain the intuition behind this utility function. Does the person likes consump- tion c? What about leisure l?
(b) Find the equation of an indifference curve given a level of utility I.
(c) Find the Marginal Rate of Substitution.
(d) Show the optimal consumption-labor choice using a plot with c in the y-axis and l in the x-axis.
(e) Find the optimal amount of consumption and leisure assuming that h = 1 and π = T = 0.
