econ 302 ass 8

econ 302 ass 8 - Christine Drews Econ 302 Toossi Section 2...

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Christine Drews Econ 302 – Toossi Section 2 Problem set 8 5/12/2009 Chapter 5 Questions for Review 7. Because intertemporal indifference curves exhibit diminishing marginal rates of time preference, the consumer generally does best not to concentrate too much of her consumption in any one period. By spreading her windfall over both periods, present and future, Jennifer is able to achieve a better outcome. If she were to spend all of her winnings during the next year, she will not be maximizing her utility. Chapter 5 Problems 10. 75,000 + 75,000/1 = $150,000 75,000 + 75,000/1.10 = $143,181.82 75,000 + 75,000(1) = $150,000 75,000 + 75,000(1.10) = $157,500 12.
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Christine Drews Econ 302 – Toossi Section 2 Problem set 8 5/12/2009 b. C2/C1 = .8 C2 = .8 C1 C2 = 100 + 100(.8) - .8C1 .8C1 = 100 + 80 - .8C1 1.6C1 = 180 C1 = 112.5 coconuts C2 = 90 coconuts Chapter 9 Questions for Review 3. A person in charge of hiring would care more about the marginal products than the average because the marginal product concept plays a pivotal role in the calculation
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econ 302 ass 8 - Christine Drews Econ 302 Toossi Section 2...

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