A consumer's behavior is described by the equation Y₁ = Ct + St where Yt, Ct and St stand respectively for his income, consumption and saving at the time period t. We assume that St 3√³ Y+1 + 717√√3 and Ct = Yt at any time = 14 period t. 1. Show that the consumer's consumption satisfies the equation: 2√3 Ct = -Ct-1 - 1912 3 2. Compute the consumer's initial income and initial savings, as well as his consumption in period 1 knowing that Co= 1206√3.
A consumer's behavior is described by the equation Y₁ = Ct + St where Yt, Ct and St stand respectively for his income, consumption and saving at the time period t. We assume that St 3√³ Y+1 + 717√√3 and Ct = Yt at any time = 14 period t. 1. Show that the consumer's consumption satisfies the equation: 2√3 Ct = -Ct-1 - 1912 3 2. Compute the consumer's initial income and initial savings, as well as his consumption in period 1 knowing that Co= 1206√3.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:A consumer's behavior is described by the equation Yt = Ct + St where Yt,
Ct and St stand respectively for his income, consumption and saving at the time
period t. We assume that St 3√³ Y+1 + 717√3 and Ct = Y, at any time
=
14
period t.
1. Show that the consumer's consumption satisfies the equation:
2√3
Ct = -Ct-1 - 1912
3
2. Compute the consumer's initial income and initial savings, as well as his
consumption in period 1 knowing that Co = 1206√3.
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