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Question 1: Two-period model where Ci and C2 are perfect substitutes 1. Draw the budget constraint...
Question 3 and 4 please ! Please go step by step so I can fully understand...
Question 3 and 4 please ! Please go step by step so I
can fully understand the solution. thank you !
Question 1: Two-period model where Ci and C2 are perfect substitutes 1. Draw the budget constraint with Yi -100, Y2 60, and r 0.2. 2. Draw the indifference curves for the preference that is represented by the lifetime utility function Ci + BC2, where 3-1. Do it for various levels of lifetime utility, such as 100, 150, and 200...
4. In a two-good world, suppose a consumer views the goods as perfect substitutes. Draw a...
4. In a two-good world, suppose a consumer views the goods as perfect substitutes. Draw a graph of the consumer's choice problem, with a budget constraint and a few indifference curves. (Assume the slope of the indifference curves is different from the slope of the budget constraint.) What is notable about the consumer's preferred bundle?
4. In a two-good world, suppose a consumer views the goods as perfect substitutes. Draw a graph of the consumer's choice problem, with a budget...
Borrowing Constraint in the Two-Period Model life, your ability to borrow is not In real usuallv...
Borrowing Constraint in the Two-Period Model life, your ability to borrow is not In real usuallv based on vour lifetime income but rather on vour current annual income. So we will consider a partial equilibrium framework of an individual who faces a borrowing constraint. That is, the household cannot borrow more than a pre-specified amount. For simplicity, we will assume that the household cannot borrow at all; thus The rest of the problem remains identical as the household wishes to...
1. (12 points) Adapted from Williamson chapter 9 question 1. Jason's income in the current period...
1. (12 points) Adapted from Williamson chapter 9 question 1. Jason's income in the current period is y 2200, and income in the future period is U2-2000. The real interest rate is 4%. (a) (2 points) Suppose that current and future consumptions are perfect comple- ments for Jason His life time utility is given by minsc, c21. Draw Jason's indifference curves (b) (2 points) Jason's indifference curves are not the usually smooth curves. The marginal condition for Jason does not...
5. Draw out examples of each of the following indifference curves: imperfect substitutes, perfect substitutes, and...
5. Draw out examples of each of the following indifference curves: imperfect substitutes, perfect substitutes, and perfect complements. 6. Jody enjoys having exactly 1 teaspoon of sugar with every cup of coffee she has. What does this say about her indifference curves between the two goods? What happens to her utility level when she is given 5 teaspoons of sugar with one coffee? (Just an explanation) 7. Jay’s Utility function is given by U(x,z) = 3x10.2 x20.8 and P1=$2 and...
Borrowing Constraint in Two-Period Model - In real life, your credit card credit limit is usually...
Borrowing Constraint in Two-Period Model - In real life, your credit card credit limit is usually half year or annual income, not your lifetime income. So, consider a twist to the two-period consumption- saving model where household faces borrowing constraint. That is, household cannot borrow more than a pre-specified amount. For simplicity, assume that the household cannot borrow at all; thus, 1 20 The rest of the problem remain identical as max {} log(60) + β1og (c) subject to co...
Doug lives for two periods. In the first period of his life he earns income Y1....
Doug lives for two periods. In the first period of his life he earns income Y1. The value of Y1 was determined by your student number. In the second period of his life, Doug is retired and does not earn any income. Doug’s decision is how much of his period one income should he save (S) in order to consume in period two. For every dollar that Doug saves in period one he has (1 + r) dollars available to...
Consider an economy occupied by two households (i- A, B) who are facing the two-period consumption...
Consider an economy occupied by two households (i- A, B) who are facing the two-period consumption problem. Each household i - A, B is facing the following utility maximization problem: max subject to ci +biy(1+r)bo where Vi and US are household i's exogenous income in period t 1.2. cỈ and c are household i's consumption in period t 1,2. bo,bi is household i's bond holdings of which bo is exogenously given, r is the real interest rate, and 0 <...
problem two please Calculate aggregate nsumpuo ., 20. (e) Suppose alternatively that in period 11, u-0.6...
problem two please
Calculate aggregate nsumpuo ., 20. (e) Suppose alternatively that in period 11, u-0.6 and s 0.05. Again, calculate aggregate consump- tion, output, and the quantity of human capital in periods 11, 12, 13,..,20. (d) Suppose now that in period 11, u 0.6 and s-0.1. Again, calculate aggregate consumption, output, and the quantity of human capital in periods 11, 12, 13.., 20. e) What do you conclude from your results in parts (a)-(d)? Discuss. Problem 2. Two-period Model...
1. Harvey Habit's utility function is U (C1, C2) = min {c1, c2}, where ci is...
1. Harvey Habit's utility function is U (C1, C2) = min {c1, c2}, where ci is his consumption of bread in period 1 and ca is his consumption of bread in period 2. The price of bread is $1 per loaf in period 1. The interest rate is 21%. Harvey earns $2,000 in period 1 and he will earn $1,100 in period 2. (a) Write Harvey's budget constraint in terms of future value. (b) How much bread does Harvey consume...
Question 3 and 4 please ! Please go step by step so I
can fully understand the solution. thank you !
Question 1: Two-period model where Ci and C2 are perfect substitutes 1. Draw the budget constraint with Yi -100, Y2 60, and r 0.2. 2. Draw the indifference curves for the preference that is represented by the lifetime utility function Ci + BC2, where 3-1. Do it for various levels of lifetime utility, such as 100, 150, and 200...
4. In a two-good world, suppose a consumer views the goods as perfect substitutes. Draw a graph of the consumer's choice problem, with a budget constraint and a few indifference curves. (Assume the slope of the indifference curves is different from the slope of the budget constraint.) What is notable about the consumer's preferred bundle?
4. In a two-good world, suppose a consumer views the goods as perfect substitutes. Draw a graph of the consumer's choice problem, with a budget...
Borrowing Constraint in the Two-Period Model life, your ability to borrow is not In real usuallv based on vour lifetime income but rather on vour current annual income. So we will consider a partial equilibrium framework of an individual who faces a borrowing constraint. That is, the household cannot borrow more than a pre-specified amount. For simplicity, we will assume that the household cannot borrow at all; thus The rest of the problem remains identical as the household wishes to...
1. (12 points) Adapted from Williamson chapter 9 question 1. Jason's income in the current period is y 2200, and income in the future period is U2-2000. The real interest rate is 4%. (a) (2 points) Suppose that current and future consumptions are perfect comple- ments for Jason His life time utility is given by minsc, c21. Draw Jason's indifference curves (b) (2 points) Jason's indifference curves are not the usually smooth curves. The marginal condition for Jason does not...
Borrowing Constraint in Two-Period Model - In real life, your credit card credit limit is usually half year or annual income, not your lifetime income. So, consider a twist to the two-period consumption- saving model where household faces borrowing constraint. That is, household cannot borrow more than a pre-specified amount. For simplicity, assume that the household cannot borrow at all; thus, 1 20 The rest of the problem remain identical as max {} log(60) + β1og (c) subject to co...
Consider an economy occupied by two households (i- A, B) who are facing the two-period consumption problem. Each household i - A, B is facing the following utility maximization problem: max subject to ci +biy(1+r)bo where Vi and US are household i's exogenous income in period t 1.2. cỈ and c are household i's consumption in period t 1,2. bo,bi is household i's bond holdings of which bo is exogenously given, r is the real interest rate, and 0 <...
problem two please
Calculate aggregate nsumpuo ., 20. (e) Suppose alternatively that in period 11, u-0.6 and s 0.05. Again, calculate aggregate consump- tion, output, and the quantity of human capital in periods 11, 12, 13,..,20. (d) Suppose now that in period 11, u 0.6 and s-0.1. Again, calculate aggregate consumption, output, and the quantity of human capital in periods 11, 12, 13.., 20. e) What do you conclude from your results in parts (a)-(d)? Discuss. Problem 2. Two-period Model...
1. Harvey Habit's utility function is U (C1, C2) = min {c1, c2}, where ci is his consumption of bread in period 1 and ca is his consumption of bread in period 2. The price of bread is $1 per loaf in period 1. The interest rate is 21%. Harvey earns $2,000 in period 1 and he will earn $1,100 in period 2. (a) Write Harvey's budget constraint in terms of future value. (b) How much bread does Harvey consume...
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