Levinn’s utility function is expressed as the following: U= C1 C2 0.3 where C1 is his first period consumption and C2 is his second period consumption. His income in the first period is $2500 and interest rate is at 10%. If at equilibrium, Levinn is neither a borrower nor a lender, then what is his expected income in the second period? Show the graph if possible

Levinn’s utility function is expressed as the following: U= C1 C2 0.3 where C1 is his first period consumption and C2 is his second period consumption. His income in the first period is $2500 and interest rate is at 10%. If at equilibrium, Levinn is neither a borrower nor a lender, then what is his expected income in the second period? Show the graph if possible

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.2P

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