32. Ann maximizes the utility U(co, c1, c2) = u(co) + du(c1) + 8u(c2) with u(c¡) = c¡ and a discount factor 8 < 1. She is indifferent between streams (81, 53, 0) and (0, 53, 100). Then & equals (A) 10%; (B) 19%; (C) 0.9; (D) not enough information. O A O B

32. Ann maximizes the utility U(co, c1, c2) = u(co) + du(c1) + 8u(c2) with u(c¡) = c¡ and a discount factor 8 < 1. She is indifferent between streams (81, 53, 0) and (0, 53, 100). Then & equals (A) 10%; (B) 19%; (C) 0.9; (D) not enough information. O A O B

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.3P

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