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Economics PLS ANSWER I WILL UPVOTE Anna has graduated and has secured her first job. She tries to figure out how much to work and
Economics PLS ANSWER I WILL UPVOTE Anna has graduated and has secured her first job. She tries to figure out how much to work and save during her working life taking her retirement into account. Since she has taking economics classes, she sets up the following simple two-period lifecycle model. She considers the choice of labour supply and savings as the results of the following maximization problem, assuming that time can be used in only two ways: leisure and market work: max U(C1 . C2, L1. L2) = VG+ VL+4(VCz+VLz). where (C1. C2) is consumption in periods 1 and 2, (Ly. L2) is leisure in periods I and 2, and p rate of time preferences. Let total time in period I and 2, respectively, be 1, the price of the consumption be 1, and the market wage rate be w. Further, assume that as retired no time is supplied to the labour market. Derive a function for Anna'a labour supply and savings
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