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Hi, could you help me with this Marie and Peter live in a two-person pure-exchange economy (risk=0). Both have utility functions of the form: u(Co,C1)
Hi, could you help me with this
Marie and Peter live in a two-person pure-exchange economy (risk=0).
Both have utility functions of the form: u(Co,C1) = alpha*ln(Co) + (1-alpha) *ln(C1)
Marie's preference parameter [Alpha] is 0.52 and her endowment is {32,68};
Peter's [Alpha] is 0.48 and his endowment is {68,36}.
a/ What is the growth rate of the economy?
b/ What is the equilibrium interest rate?
c/ What is the consumption optimum C?
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