Reference no: EM131303628
Adam Smith is 45 years old. He has assets (wealth) of $20,000 and has no debts or liabilities. He knows that he will work for 20 more years and will live 5 years after that, when he will earn nothing. His salary each year for the rest of his working career is $14,000. (There are no taxes.) He wants to distribute his consumption over the rest of his life in such a way that he consumes the same amount each year. He cannot consume in total more than his current wealth plus the sum of his income for the next 20 years. Assume that the rate of interest is zero and that Smith decides not to leave any inheritance to his children.
a. How much will Adam consume this year and next year? How did you arrive at your answer?
b. Plot on a graph Adam's income, consumption, and wealth from the time he is 45 until he is 70 years old. What is the relationship between the annual increase in his wealth and his annual saving (income minus consumption)? In what year does Adam's wealth start to decline? Why? How much wealth does he have when he dies?
c. Suppose Adam receives a tax rebate of $100 per year, so his income is $14,100 per year for the rest of his working career. By how much does his consumption increase this year and next year?
d. Now suppose Adam receives a 1-year-only tax refund of $100-his income this year is $14,100; but in all succeeding years, his income is $14,000. What happens to his consumption this year? in succeeding years?
|
Write a function to compute n! using recursion
: Recursion: Write a function to compute n! using recursion. (Note that this is not the most efficient way to compute n!. However, it is conceptually a recursive calculation that is easy to implement and test recursion in MATLAB.)
|
|
A deformation of a rectangular bar
: Consider a deformation of a rectangular bar whose deformed geometry is given.- write the expression of the S11 component of the second Piola-Kirchhoff stress as a function of α.
|
|
Deploying a transparent proxy service with keyword filtering
: Deploying a DHCP service for the client's network configuration - Deploying a TFTP service. The client should be able to upload and download files to the TFTP server.
|
|
Write a research paper about the surrealism
: Write a research paper about the surrealism.What is surrealism? What does it stand for? Is there any contemporary artist practicing surrealism in technological era?
|
|
How much will adam consume this year and next year
: Suppose Adam receives a tax rebate of $100 per year, so his income is $14,100 per year for the rest of his working career. By how much does his consumption increase this year and next year?
|
|
A simple shear deformation of a square
: When the material is incompressible Mooney-Rivlin hyperelastic material with A10 = 80 MPa and A01 = 20 MPa, write the expression of the S12 component of the second Piola-Kirchhoff stress as a function of α.
|
|
Statements concerning beta coefficients
: Which of the following statements concerning beta coefficients is (are) correct?. Investors who tend to be risk averse should have portfolio made up mostly of high-beta coefficient securities. Beta coefficients of particular securities change over ti..
|
|
Summarizing a report about thermal cracking of pavement
: Summarizing a report about "Thermal cracking of pavement", I couldn't fine Civil Eng. Field so I chose applied science! Determining the need for crack treatment. Evaluating and assessing the performance of the crack treatment.
|
|
Write a review about the article the gogh and komarov
: Write a review about the article The Gogh and Komarov .To look art through two different eyes is a challenging adventure. However, our taste of art might conflict itself in the next day, or even during the critique process. Three weeks ago, when we..
|