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Calculate C1. Round your answer to the nearest dollar.

Calculate C1. Round your answer to the nearest dollar.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider a household that discounts the future with 3 = 0.9. The real interest rate is 4 percent and the flow utility function is u(c) = ln(c). The household's lifetime budget constraint is given by C₁ + household lives for two periods and has no initial wealth. 10,000 and y2 = 8,000. Assume y₁ Calculate C₁. Round your answer to the nearest dollar. - C2 1+R Y₁ + - Y2 1+R Note the
Transcribed Image Text:Consider a household that discounts the future with 3 = 0.9. The real interest rate is 4 percent and the flow utility function is u(c) = ln(c). The household's lifetime budget constraint is given by C₁ + household lives for two periods and has no initial wealth. 10,000 and y2 = 8,000. Assume y₁ Calculate C₁. Round your answer to the nearest dollar. - C2 1+R Y₁ + - Y2 1+R Note the
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What is this household's marginal propensity to consume at c1 (in percent)?

 

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