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The diagram depicts Julia's choice of consumption now and later. She has no income now and an income of $100 later. Based on this information,
The diagram depicts Julia's choice of consumption now and later. She has no income now and an income of $100 later. Based on this information, state whether the following statements are True or False, and justify your answer.
Julia's endowment Consumption later (5) Feasible frontier (10% interest rate) Feasible frontier (78% interest rate) 0 30 56 70 91 Consumption now (5) (a) When the interest rate is 10%, if Julia borrows $23 now then she can consume $70 later. (b) When the interest rate is 10%, the marginal rate of transformation of goods from consumption later to consumption now is 0.1. (c) When the interest rate is 78%, the maximum that Julia can borrow now is $56 (rounded to the nearest dollar). (d) When the interest rate is 78%, a consumption plan of $30 now and $67 later is in Julia's feasible setStep by Step Solution
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