1. Consider an economy with a constant population of N = 100. Each person is endowed

with y = 20 units of the consumption good when young, and nothing when old.

(a) What is the equation for this economy's feasible set (with no money)? (10%)

(b) Portray an individual's feasible set on a clearly labelled diagram. (5%)

(c) Now consider the monetary equilibrium. Write down equations that represent the

constraints on fifirst- and second-period consumption for a typical person. Combine these

constraints into a lifetime budget constraint. (10%)