Determine comsumption and savings of maria in period

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Reference no: EM13224219

maria lives 2 periods. in period 1, she is a student, her income is 0 and she does not pay axes. in period 2, she will have a BA. her income after tax will be $55000. the interest rate is 10%, her utility is given by U(c, c')=log(c)+log(c'). It can be shown that the optimal consumption allocation is c=05we, c'=0.5(1+r)we

1. determine Maria's lifetime wealth.

2. Determine comsumption and savings of Maria in period 1 and in period 2.'

3. Maria decides to switch a major and is now a student in business. in period 2, she will have a BA in business and her income will be $88000. determine Maria's lifetime wealth. determine consumption and sacving of maria in period 1 and period 2.

Reference no: EM13224219

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