User Account

All Pages

Intertemporal budget constraint

Assignment Help Business Economics
Reference no: EM132953295

Intertemporal budget constraint. Utility = min(C1 Budget line 1:  Y12

  1.  , C2 )   
  2.  = $800.   Y = $1,300.    The interest rate is 5 percent, both for borrowing and saving.

Draw the budget line, with solved numbers. Solve the optimal consumption levels to choose in time 1 and time 2. Draw the indifference curve.

  1.  Budget line 2: The interest rate for borrowing and saving has increased to 15 percent. Solve the new optimal consumption levels to choose.  Draw the indifference curve.

C. Draw the auxiliary budget line. Include the point S. Draw the indifference curve. 

Reference no: EM132953295

Questions Cloud

What is the book value of the asset retirement obligation : What is the book value of the asset retirement obligation after 2 years? Use a positive number for a debit balance and a negative number for a credit balance
What notional amount hedges your bank overall exposure : The modified duration of the fixed and floating legs of the swap are 6.0 and 1.0. What notional amount hedges your bank's overall exposure
Explain four different economic arguments in support : 1) An advocate of environmental protection is proposing that the government focus on subsidizing the use of environmentally friendly technology, as opposed to p
Calculate the interest amounts at december : Calculate the interest amounts at December 31st and April 30th and use those calculated values to prepare your journal entries
Intertemporal budget constraint : Draw the budget line, with solved numbers. Solve the optimal consumption levels to choose in time 1 and time 2. Draw the indifference curve.
What is the EPS immediately following the repurchase : The company's stock trades at $45 per share. B Corp will repurchase 20% of its shares in the open market for $45 per share. What is the EPS immediately
Find the maximum profit : A firm has two factories for which costs are given by: Factory 1: C1 (Q1) = 1.5Q1^2Factory 2: C2 (Q2) = 0.5Q2^2
Prepare journal entry to record purchase for rodriguez co : Rodriguez Company pays $370,000 for real estate plus $19,610 in closing costs. Allocate the total cost among the three purchased assets.
Find reduces moral hazard : Many economists argue that a rescue of a financial institution should protect the institution's creditors from losses but NOT protect its owners:

Reviews

Write a Review

Business Economics Questions & Answers

  What is the role of local government leadership

What is the role of local government leadership in assuring that departments and divisions work together to achieve municipal goals and objectives?

  What discretionary fiscal and monetary policies

What discretionary fiscal and monetary policies might Keynesian economists recommend to close a recessionary gap, and thus stabilize an economy? Explain how they work. What are the limitations of these policies?  Why might they not be effective?

  Average worker in organization

Are U.S. Executives paid too much particularly compared to the average worker in their organization?

  Sexually exploitive assault

Hardee's and Carl's Jr. recently used a television commercial featuring a school teacher dancing on the top of her desk while a room full of buys performed a rap song entitled "I Like Flat Buns." The song seemed appropriate since the ad was for the P..

  Using typically shaped indifference curves

Using typically shaped indifference curves, graphically decompose the impact of a price increase into a substitution effect and an income effect. Based on your diagram, indicate whether this good is normal or inferior. How do you know? Is the Law of ..

  Adjust interest rates based on economic conditions

Members of the Federal Reserve Bank, the central bank of the United States, meet every six weeks to adjust interest rates based on economic conditions.

  Percentage change in consumer demand for apples

What is the percentage change in the consumer's demand for apples, assuming that the price of apples and all other relevant variables

  What type of preferences is mike exhibiting

Suppose there are two types of shirts available to Carl: red shirts and black shirts Carl is always willing to exchange three black shirts for one red shirt. What type of preferences is mike exhibiting? Are Carl's preferences monotonic? How do you kn..

  Calculate the change in the quantity of hotdogs sold

You sell hotdogs outside the library. Originally you sell your hotdog for $6 each and you sell 60 hotdogs per day. You trial seeling your hotdogs for $4 each

  Large amount of data

Briefly describe and explain any three problems that a decision maker has when encountered with a large amount of data.

  What would nation bs best choice in regards to trade

Suppose Nation A can produce 2 million pounds of sugar per week OR 1 million pounds of rice in a week and Nation B can produce 10 million pounds of sugar per week OR 3 million pounds of rice in a week. If this is a two-good, two nation model

  Combined output of the two countries

A worker in Lakeland can produce either 5 units of wheat or 30 units of fish per year, and a worker in Hillcountry can produce either 30 units of wheat

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd