der a two-period living consumer with a utility function, u(c)=sqrt(c). Suppose the real interest rate, R=10% and the utility discount factor, beta=0.95. If the consumer wants to maximize lifetime utility, what will be the growth rate of her consumption from the current to the future period?

der a two-period living consumer with a utility function, u(c)=sqrt(c). Suppose the real interest rate, R=10% and the utility discount factor, beta=0.95. If the consumer wants to maximize lifetime utility, what will be the growth rate of her consumption from the current to the future period?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.2P

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Consider a two-period living consumer with a utility function, u(c)=sqrt(c). Suppose the real interest rate, R=10% and the utility discount factor, beta=0.95. If the consumer wants to maximize lifetime utility, what will be the growth rate of her consumption from the current to the future period?

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