Consider a household where there are two children, a girl and a boy. Parents in this household
Question:
Consider a household where there are two children, a girl and a boy.
Parents in this household derive utility from their children’s educational attainment. Suppose that in order to have their children educated, parents have to spend an amount x per month if it’s a girl, and y if it’s a boy. Let the household’s utility be as follows:
a. If the woman in this household does not work additional hours in her investment project, which can be potentially financed by a microfinance enterprise, then the households’ income is w = 1,100 taka.
Compute the household’s optimal decision in this case.
b. Suppose that she is successful at obtainting a loan from a microfinance institution, in which case she carries out her investment project and brings an additional 700 taka to the household. What would be the household’s optimal strategy?
Step by Step Answer:
The Economics Of Microfinance
ISBN: 978-0262513982
2nd Edition
Authors: Beatriz Armendariz ,jonathan Morduch