Homework Answers
Using the Lagrangian set up to solve the optimizaopti problem
Maximize the utility function with respect to the budget constraint
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help with question 3 please
where r is the real interest rate and we is the...
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. If we=1,000 represents a two-period consumer's lifetime wealth and r=0.05 denotes the real rate of...
1. If we=1,000 represents a two-period consumer's lifetime wealth and r=0.05 denotes the real rate of interest, the slope of the consumer's budget line is equal to Question 12 options: a. -1.05 b. 50.05 c. -0.95 d. -0.00005 e. 50 2. Suppose that the utility function of the consumer is U(c,c’)=ln(c) + b ln( c’ ) . Analyze the solution of the model to show show that optimal consumption increases over time when Question 3 options: a. b > 1...
Please answer question a Question 2: The consumption function with taxes that change over time To...
Please answer question a
Question 2: The consumption function with taxes that change over time To do this question you need to be familiar with the Appendix to chapter 4, which deals with the determination of the two period consumption and is on the class website (see OnQ). Households must decide how much they wish to spend on consumption today ((1+1Jel) versus consumption in the future (0+τ)G), where t is the rate of taxation on consumption (HST). Households are constrained...
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...
1. Consider an agent who values consumption in period 0 and 1 according to the following...
1. Consider an agent who values consumption in period 0 and 1 according to the following utility function: u(co, C)In(Co)+8 In(c1) is a discount factor (5 < 1) which indicates that the agnet prefers to consume today more than he can tomorrow. Suppose that the agent is given a total wealth today of w and that he may save any portion of this money in order to consume tomorrow. If he saves money he is paid interest r. Thus the...
Question 1: Two-period model where Ci and C2 are perfect substitutes 1. Draw the budget constraint...
Question 1: Two-period model where Ci and C2 are perfect substitutes 1. Draw the budget constraint with Yi- 100, Y2 60, and 0.2 2. Draw the indifference curves for the preference that is represented by the lifetime utility function G +SC, where β-1. Do it for various levels of lifetime utility, such as 100, 150. and 200. 3. Using the budget constraint and the indifference curves, determine the optimal values of Ci and C2. Does the household have positive consumption...
2. Consider the Cobb-Douglas utility function u(x,y) = x2y2. Let the budget 1, where pr, py...
2. Consider the Cobb-Douglas utility function u(x,y) = x2y2. Let the budget 1, where pr, py are the prices and I denotes the constraint be prx + pyy income. (a) Write the Lagrangian for this utility maximization problem. (b) Solve the first-order conditions to find the demand functions for both good a and good y. [Hint: Your results should only depend on the pa- rameters pa, Py, I.] (c) In the optimal consumption bundle, how much money is spend on...
For Question 12 to 15, let the utility function of the household be U(c,d) = ln(c)...
For Question 12 to 15, let the utility function of the household be U(c,d) = ln(c) + Bln(c'), where B is a parameter between 0 and 1, and assume that there is always an interior solution to the household's problem. 12. What is the marginal rate of substitution of current consumption for future con- sumption MRS given this utility function? How does it change with c and c'? 13. Solve the household's optimization problem with the lifetime budget constraint. That...
Question 1 (1 point) If we represents a two-period consumer's lifetime wealth and r denotes the...
Question 1 (1 point) If we represents a two-period consumer's lifetime wealth and r denotes the real rate of interest, the slope of the consumer's budget line is equal to Or (1+we) O-1/(1+r) Orxwe. -(1+r) O-r/(1+we) Question 2 (1 point) Intertemporal decisions are economic decisions O involving trade-offs across periods of time. O made in between two periods of time. that ignore concerns about the future. that are made only once. O made within a given period of time. Question...
can anyone help me with this question? 2. An review of intertemporal optimization: Suppose a consumer's utility function is given by U(c,2) where ci is consumption in period 1 and ca is consum...
can
anyone help me with this question?
2. An review of intertemporal optimization: Suppose a consumer's utility function is given by U(c,2) where ci is consumption in period 1 and ca is consumption in perio You can assume that the price of consumption does not change between periods 1 and 2. The consumer has $100 at the beginning of period 1 and uses this money to fund consumption across the two periods (i.e. the consumer does not gain additional income...
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...
Please answer question a
Question 2: The consumption function with taxes that change over time To do this question you need to be familiar with the Appendix to chapter 4, which deals with the determination of the two period consumption and is on the class website (see OnQ). Households must decide how much they wish to spend on consumption today ((1+1Jel) versus consumption in the future (0+τ)G), where t is the rate of taxation on consumption (HST). Households are constrained...
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...
1. Consider an agent who values consumption in period 0 and 1 according to the following utility function: u(co, C)In(Co)+8 In(c1) is a discount factor (5 < 1) which indicates that the agnet prefers to consume today more than he can tomorrow. Suppose that the agent is given a total wealth today of w and that he may save any portion of this money in order to consume tomorrow. If he saves money he is paid interest r. Thus the...
Question 1: Two-period model where Ci and C2 are perfect substitutes 1. Draw the budget constraint with Yi- 100, Y2 60, and 0.2 2. Draw the indifference curves for the preference that is represented by the lifetime utility function G +SC, where β-1. Do it for various levels of lifetime utility, such as 100, 150. and 200. 3. Using the budget constraint and the indifference curves, determine the optimal values of Ci and C2. Does the household have positive consumption...
2. Consider the Cobb-Douglas utility function u(x,y) = x2y2. Let the budget 1, where pr, py are the prices and I denotes the constraint be prx + pyy income. (a) Write the Lagrangian for this utility maximization problem. (b) Solve the first-order conditions to find the demand functions for both good a and good y. [Hint: Your results should only depend on the pa- rameters pa, Py, I.] (c) In the optimal consumption bundle, how much money is spend on...
For Question 12 to 15, let the utility function of the household be U(c,d) = ln(c) + Bln(c'), where B is a parameter between 0 and 1, and assume that there is always an interior solution to the household's problem. 12. What is the marginal rate of substitution of current consumption for future con- sumption MRS given this utility function? How does it change with c and c'? 13. Solve the household's optimization problem with the lifetime budget constraint. That...
Question 1 (1 point) If we represents a two-period consumer's lifetime wealth and r denotes the real rate of interest, the slope of the consumer's budget line is equal to Or (1+we) O-1/(1+r) Orxwe. -(1+r) O-r/(1+we) Question 2 (1 point) Intertemporal decisions are economic decisions O involving trade-offs across periods of time. O made in between two periods of time. that ignore concerns about the future. that are made only once. O made within a given period of time. Question...
can
anyone help me with this question?
2. An review of intertemporal optimization: Suppose a consumer's utility function is given by U(c,2) where ci is consumption in period 1 and ca is consumption in perio You can assume that the price of consumption does not change between periods 1 and 2. The consumer has $100 at the beginning of period 1 and uses this money to fund consumption across the two periods (i.e. the consumer does not gain additional income...
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