How much should he save every (good) time period

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Consider the individual in the preceding question once again. He earns either zero or $25 with equal probability in every time period. There is no employment insurance scheme.

(a) If this individual thinks about the fact that he may be unemployed in any time period, how much should he save every (good) time period in order to have the maximum average or expected utility over time?

Reference no: EM131072425

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