2. David has the utility function u(e,g) = 8,000ln(e) + g, where e represents money spent on education and g represents money spent on other goods. He has M = $50,000 to spend. (i) Suppose that the...

Extracted text: 2. David has the utility function u(e,g) = 8,000ln(e) + g, where e represents money spent on education and g represents money spent on other goods. He has M = $50,000 to spend. (i) Suppose that the government gives David a lump-sum subsidy of $L. Find his optimal bundle. (ii) Now suppose that the government gives David a voucher for $V worth of education and a lump-sum subsidy of $(L – V) instead. Find David's optimal bundle. (Assume V <>