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Consider the following two-period problem for the representative consumer Y = 50 T=5 Y2 = 20 T = 10 r = 0.10 C = consumption

Consider the following two-period problem for the representative consumer

Y = 50

T=5

Y2 = 20

T = 10

r = 0.10

C = consumption in the first period

C2 = consumption in the second period

S saving in the first period

U(C1, C2) min (C1, C2}

What is the optimal saving, S*, that maximizes the representative consumer's lifetime utility?

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