Consider the following intertemporal consumption problem with one good and two periods. The quantity of the good consumed in period 1 and period 2 are q1 and q2. The price of each unit of the good is $1 in both periods. The consumer's income is 11=10 in the first period and 12-12 in the second period. The consumer can borrow or save money at the interest rate of 50%, that is, r=0.50. The consumer's utility function is u(91,92)= 9192. The optimal choice of q1 is and the consumer will
Consider the following intertemporal consumption problem with one good and two periods. The quantity of the good consumed in period 1 and period 2 are q1 and q2. The price of each unit of the good is $1 in both periods. The consumer's income is 11=10 in the first period and 12-12 in the second period. The consumer can borrow or save money at the interest rate of 50%, that is, r=0.50. The consumer's utility function is u(91,92)= 9192. The optimal choice of q1 is and the consumer will
Chapter1: Making Economics Decisions
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![Consider the following intertemporal consumption problem with one good and two periods. The quantity of the good
consumed in period 1 and period 2 are 9₁ and 92. The price of each unit of the good is $1 in both periods. The
consumer's income is 11=10 in the first period and 12=12 in the second period. The consumer can borrow or save
money at the interest rate of 50%, that is, r=0.50. The consumer's utility function is u(91,92)= 9192.
The optimal choice of q1 is
✓and the consumer will](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F250f1121-2ee3-42ba-abe5-f19bba20f3e7%2F87455dd6-bcea-4c61-8718-6acccac5b3ec%2F1y4p0ke_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the following intertemporal consumption problem with one good and two periods. The quantity of the good
consumed in period 1 and period 2 are 9₁ and 92. The price of each unit of the good is $1 in both periods. The
consumer's income is 11=10 in the first period and 12=12 in the second period. The consumer can borrow or save
money at the interest rate of 50%, that is, r=0.50. The consumer's utility function is u(91,92)= 9192.
The optimal choice of q1 is
✓and the consumer will
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