eek. We carns $1,000 each week and earns a real interest rate of p = 0.01 on any money ved today. He also needs to pay the same interest rate if he borrows money today and pays it next week. If his utility function is U (C₁, C₂) = c₂, where c₁ is units of consumption day and c₂ is units of consumption next week, how many units will he consume this week?

eek. We carns $1,000 each week and earns a real interest rate of p = 0.01 on any money ved today. He also needs to pay the same interest rate if he borrows money today and pays it next week. If his utility function is U (C₁, C₂) = c₂, where c₁ is units of consumption day and c₂ is units of consumption next week, how many units will he consume this week?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.2P

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