Economics

1 ) presumption : U (C1 , C2 lumber C1 1 /3 ( record C2Y 10I1 /2 , household endowments for two consummations 20 and 0 remarkivelyA . optimal Consumption and nest egg LevelsZ ( pound C1 1 /3 (log C2 ) - (20 C1 solving for the derived power of the Lagrange with respect to C1 and C2 , we find that log C1 6 .712 and log C2 4 .507 . nest egg is touch to 1 .5B . Investment expect purpose of the FirmWe may write the investment function of the fuddled as follows : I (Y2 / nose candy /i . Y is positively colligate to I i is negatively related to I2 ) reckon constraints : y - intercept 10 x - intercept 5 . optimum Consumption for the premiere period is pit to 10 . savings is equal to 0Consumption for the south period is equal to 2 .5 . savings is equal to 2 .5 (Y-d .

General deficit / unornamented of the sparing is equal to S (rw 0 .5 . If B is equal to 0 .9 , potential savings decreases to 0 .5 in the present moment period . Trade otiose /deficit is 0 .13 ) Given : U (C1 , C2 log C1 log C2 , household endowments for two periods 20 and 0 respectivelyOptimal Consumption and Savings LevelsZ (log C1 log C2 ) - (20 C1 solving for the differential of the Lagrange with respect to C1 and C2 , we find that log C1 7 .014 and log C2 5 .47 . Savings is equal to 1 .8 . Budget constraint is spring by y 20...If you command to get a estimable essay, install it on our website: Orderessay

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