hw7 - Homework 7(Due October 23 1[page 24 3 N2 2[page 25 3...

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Homework 7 (Due October 23) 1. [page 24, 3] N2 2. [page 25, 3] N3 3. [page 25, 3] A2 4. [page 25, 3] A3 5. [page 60, 3] N1 (Reminder: k 0 = K 0 /N .) 6. In the context of our life-cycle model, a person born at t prefers leisure at t and consumption at t + 1 . His utility function is
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Unformatted text preview: u (1 − l yt , c ot +1 ) = p 1 − l yt + √ c ot +1 , where l t is the length of time he works at young (so 1 − l yt the length of time he rests). Solve the optimal l yt for given w t and r t +1 . 1...
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  • Spring '07
  • MBIEKOP
  • Macroeconomics, Utility, Johannesburg, life-cycle model, South African National Roads Agency, K0 /N.

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