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Unformatted text preview: 1 c . Here we can rule out corner solutions, so c is optimal if f c 0, where f c c 1 1 c . Case 3: U c , c 1 c 1 c 1 , 0 1 Now consuming c at t 0 and c 1 1 c at t 1 gives you utility in the amount of f c c 1 1 c . Here we can rule out conrer solutions, so c is optimal if f c 0, where f c 2 c 1 2 1 c ....
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This note was uploaded on 04/02/2009 for the course ECON 3140 taught by Professor Mbiekop during the Spring '07 term at Cornell University (Engineering School).
 Spring '07
 MBIEKOP
 Macroeconomics

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