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Emmy is deciding how much money to allocate to consumption this and next week, c1 and c2, respectively. Emmy's utility function is u(c1,c2)=c1c22. Her income
Emmy is deciding how much money to allocate to consumption this and next week, c1 and c2, respectively. Emmy's utility function is u(c1,c2)=c1c22. Her income is M1=$200 this week and M2=$180 next week. Assume that the price of stuff today is $1 per unit, and the inflation rate is 10 percent (=0.1). Suppose the interest rate is 20 percent (i=0.2). How much does Emmy save this week? 83315551584311632 Question 4 1 pts Ella is deciding how much money to allocate to consumption today and tomorrow, c1 and c2 respectively. Ella's utility function is u(c1,c2)=2c1+c2. Assume that the price of stuff today is $1 per unit, and there is no inflation (=0). What is the minimal interest rate i that would induce Ella to save some money for tomorrow instead of spending everything today? 100 percent (i=1) 75 percent (i=0.75) 50 percent (i=0.5) 20 percent (i=0.2) Emmy is deciding how much money to allocate to consumption this and next week, c1 and c2, respectively. Emmy's utility function is u(c1,c2)=c1c22. Her income is M1=$200 this week and M2=$180 next week. Assume that the price of stuff today is $1 per unit, and the inflation rate is 10 percent (=0.1). Suppose the interest rate is 20 percent (i=0.2). How much does Emmy save this week? 83315551584311632 Question 4 1 pts Ella is deciding how much money to allocate to consumption today and tomorrow, c1 and c2 respectively. Ella's utility function is u(c1,c2)=2c1+c2. Assume that the price of stuff today is $1 per unit, and there is no inflation (=0). What is the minimal interest rate i that would induce Ella to save some money for tomorrow instead of spending everything today? 100 percent (i=1) 75 percent (i=0.75) 50 percent (i=0.5) 20 percent (i=0.2)
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