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Let the utility function of the representative consumer be u(c,n)=c^(2/3)(1-n)^(1/3) Let the production function be y=2k^(1/2)n^(1/2) c=final good consumption, n=work effort, k=capital services, y=production output.
Let the utility function of the representative consumer be u(c,n)=c^(2/3)(1-n)^(1/3)
Let the production function be y=2k^(1/2)n^(1/2)
c=final good consumption, n=work effort, k=capital services, y=production output.
The household is endowed with k0=1 units of capital.
Write down the household's optimization problem, and then compute the social optimum
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