Course: Microeconomics - Intertemporal ConsumptionGiven the following data: ; where p1 = 10; m1 (income 1st period) = 100; m2 (income 2nd period) = 120; r (interest rate) = 0.2; and (inflation rate) = 0.2.So the quantities demanded of both goods are:a) C1 = 10 ; C2 = 10b) C1 = 15 ; C2 = 8c) C1 = 12.3 ; C2 = 7.4d) C1 = 8.7 ; C2 = 11.3THANKS :D

For intertemporal choice problems firstly we derive the aggregate budget constraint . Budget…

Answered: Course: Microeconomics - Intertemporal…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Course: Microeconomics - Intertemporal Consumption
Given the following data: ; where p₁ = 10; m₁ (income 1st period) = 100; m₂ (income 2nd period) = 120; r (interest rate) = 0.2; and (inflation rate) = 0.2.

So the quantities demanded of both goods are:

a) C1 = 10 ; C2 = 10
b) C1 = 15 ; C2 = 8
c) C1 = 12.3 ; C2 = 7.4
d) C1 = 8.7 ; C2 = 11.3

THANKS :D

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