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Sukis utility function is = .#$.%$ !% Where C1 is consumption in period 1 and C2 is consumption in period 2. The interest rate is 10%. Suki has $10,000 today and will receive $10,000 in period 2. a. Use the Lagrangian method to find how much Suki will consume in each period. b. Assume the interest rate falls to 5%. At this new rate, how much will Suki consume in each period? c. Find the present value of income..

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Sukis utility function is = .#$.%$ !% Where C1 is consumption in period 1 and C2 is consumption in period 2. The interest rate is 10%. Suki has $10,000 today and will receive $10,000 in period 2. a. Use the Lagrangian method to find how much Suki will consume in each period. b. Assume the interest rate falls to 5%. At this new rate, how much will Suki consume in each period? c. Find the present value of income.

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Sukis utility function is Where C1 is consumpt.pdf

  • 1. Sukis utility function is = .#$.%$ !% Where C1 is consumption in period 1 and C2 is consumption in period 2. The interest rate is 10%. Suki has $10,000 today and will receive $10,000 in period 2. a. Use the Lagrangian method to find how much Suki will consume in each period. b. Assume the interest rate falls to 5%. At this new rate, how much will Suki consume in each period? c. Find the present value of income.