Intertemporal choice

1. Why don't older household dissave to the extent predicted by the theory?
2. Let the income and consumption in the two periods be (Y₁, C₁) and (Y₂, C₂) respectively.Suppose = 0. What do the indifference curves look like? What's the optimal bundle?
3. Let the income and consumption in the two periods be (Y₁, C₁) and (Y₂, C₂) respectively. Which part of the budget line, when consumed, implies the consumer is a borrower?
4. Why do consumers get a lower utility from one unit of consumption tomorrow than from one unit of consumption today?
5. Explain what a discount factor = .75 implies.