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QUESTION 3 Consider the following intertemporal consumption problem with one good and two periods The quantity of the good consumed in period 1 and
QUESTION 3 Consider the following intertemporal consumption problem with one good and two periods The quantity of the good consumed in period 1 and period 2 are q1 and 42. The price of each unit of the good is 51 in both periods The consumer's income is 11-10 in the first period and 12-12 in the second period. The consumer can borrow or save money at the interest rate of 25%, that is -0.25 The consumer's utility function is 91.92)-992 The consumer optimally chooses qs and q Part 1) The optimal mix of qs and a2 is Part 2) The consumer will purchase Q1 Part 3) In the first period, the consumer will (your answer should be q2 as a function of q) (your answer should be a number) (select save or borrow) the amount of $ (select a number)
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