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hello please help i am in need of double checking FOCs. Consider a one period economy. There is one typical consumer in the economy, whose
hello please help i am in need of double checking FOCs.
Consider a one period economy. There is one typical consumer in the economy, whose utility function is U(c, l) = log(c) + blog(l), where c denotes the consumption of the final good and I denotes leisure. The consumer's endowment of time is 1 unit. There is one firm in the economy, that has a production function of Y = AF(n) = And-, where n is the labor input and A is total factor productivity. In the economy, the real price of final goods is normalized to 1 and w is the real wage. There is also a government is the economy, and government spending in real terms is exogenous and denoted with G. The government raise funds through a lump sum real tax T. a. Define the consumer's optimality problem, and derive the consumer's first order condi- tions. (Tip: don't forget the consumer's time constraint.)Step by Step Solution
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