Consumer has utility function In(c1)+beta"In(c2), where beta=1. Interest rate i=50%. Income y1-10 and y2-50. There is no government. Optimal saving for the consumer is s= (Hint: s can be positive or negative)

Consumer has utility function In(c1)+beta"In(c2), where beta=1. Interest rate i=50%. Income y1-10 and y2-50. There is no government. Optimal saving for the consumer is s= (Hint: s can be positive or negative)

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.2IP

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Question

Consumer has utility function In(c1)+beta"In(c2), where beta=1.
Interest rate i=50%.
Income y1-10 and y2-50.
There is no government.
Optimal saving for the consumer is s=
(Hint: s can be positive or negative)

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