On Bilbos quest the rest of the group decided that he was ho

On Bilbo’s quest, the rest of the group decided that he was holding them back, so one morning, they left him stranded in the Mirkwook Forest. Bilbo is able to work 100 hours a week. He can split this time between gathering magical stones and gathering berries. His production functions are: Berries= sqrt(Berries, Labor) Stones = L(sub Stones) And his utility function is: - = 9 ln (B) + 8 ln (S)

b. What will the optimal levels of Berries and Stones be?

Solution

As We know that utility directly related with consumption of the goods and services. in this case I will relate utility with barries and indirectlly with stones.so optimal level of barries and stones100/9+100/8.11+12.5