Consider the household model that you have seen in class but now assume that the goal of the household is to consume twice as much in period 2 as in period 1. Sheearns $100 in the first period and $150 in the second period. The interest rate is 5%. What is her optimal saving in the first period?Note: Type in your answer approximated to two decimal points, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were enteredincorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard will automatically delete itand you should not do anything about it.

Consumption: It refers to the amount of goods and services people will consume. The more the…

Consider the household model that you have seen in class but now assume that the goal of the household is to consume twice as much in period 2 as in period 1. She earns $100 in the first period and $150 in the second period. The interest rate is 5%. What is her optimal saving in the first period?

Consider the household model that you have seen in class but now assume that the goal of the household is to consume twice as much in period 2 as in period 1. She earns $100 in the first period and $150 in the second period. The interest rate is 5%. What is her optimal saving in the first period?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.3P

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Question

Consider the household model that you have seen in class but now assume that the goal of the household is to consume twice as much in period 2 as in period 1. She
earns $100 in the first period and $150 in the second period. The interest rate is 5%. What is her optimal saving in the first period?
Note: Type in your answer approximated to two decimal points, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered
incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard will automatically delete it
and you should not do anything about it.

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