Oct 02, 2017 term paper 2

IF A CONSUMER HAS PREFERENCES U = X 1 X 2 OVER THE STEADY-STATE LEVELS OF CONSUMPTION IN THE TWO…

This paper concentrates on the primary theme of IF A CONSUMER HAS PREFERENCES U = X 1 X 2 OVER THE STEADY-STATE LEVELS OF CONSUMPTION IN THE TWO… in which you have to explain and evaluate its intricate aspects in detail. In addition to this, this paper has been reviewed and purchased by most of the students hence; it has been rated 4.8 points on the scale of 5 points. Besides, the price of this paper starts from £ 40. For more details and full access to the paper, please refer to the site.

If a consumer has preferences U = x1x2 over the steady-state levels of consumption in the two periods of life, show that the utility-maximizing choices satisfy x2/x1 = 1 + r. Use this result to calculate the capital–labor ratio in the steady-state equilibrium given the consumption possibility frontier from exercise 19.4. What is the effect on the capital– labor ratio of an increase in n and α? Explain.

Exercise 19.4

Why might the purchase of capital (instead of the rental of capital) affect a firm’s profit maximization decision?


0% Plagiarism Guaranteed & Custom Written, Tailored to your instructions


International House, 12 Constance Street, London, United Kingdom,
E16 2DQ

UK Registered Company # 11483120


100% Pass Guarantee

Order Now

STILL NOT CONVINCED?

We've produced some samples of what you can expect from our Academic Writing Service - these are created by our writers to show you the kind of high-quality work you'll receive. Take a look for yourself!

View Our Samples

corona virus stop
FLAT 25% OFF ON EVERY ORDER.Use "FLAT25" as your promo code during checkout