Solved

The Household Problem Is to Solve:
A) maxctadey cMur U=u(ctodap ,cfuture )\max _ { c _ { \text {tadey } } \cdot c _ { \text {Mur } } } U = u \left( c _ { \text {todap } } , c _ { \text {future } } \right)

Question 22

Multiple Choice

The household problem is to solve:


A) maxctadey cMur U=u(ctodap ,cfuture ) \max _ { c _ { \text {tadey } } \cdot c _ { \text {Mur } } } U = u \left( c _ { \text {todap } } , c _ { \text {future } } \right)
B) maxctodoy cMurr ctoday +cfuture (1+R) =Xˉ, subject to U=u(ctoday ,cfuture ) \max _ { c _ { \text {todoy } } \cdot c _ { \text {Murr } } } c _ { \text {today } } + c _ { \text {future } } ( 1 + R ) = \bar { X } \text {, subject to } U = u \left( c _ { \text {today } } , c _ { \text {future } } \right)
C) mincitdoy cMurs U=u(ctoduy ) +βu(cfuture ) , subject to ctodup +cfuture (1+R) =Xˉ\min _ { c _ { \text {itdoy } } \cdot c _ { \text {Murs } } } U = u \left( c _ { \text {toduy } } \right) + \beta u \left( c _ { \text {future } } \right) , \text { subject to } c _ { \text {todup } } + c _ { \text {future } } ( 1 + R ) = \bar { X }
D) maxctodoby ,cAurre U=u(ctodav ) +βu(cfuture ) , subject to \max _{c_{\text {todoby }}, c_{\text {Aurre }}} U=u\left(c_{\text {todav }}\right) +\beta u\left(c_{\text {future }}\right) , \text { subject to }ctoday +cfutare 1+R=Xˉc_{\text {today }}+\frac{c_{\text {futare }}}{1+R}=\bar{X}
E) maxctadoy cMurs U=u(ctoday ) +βu(cfuture ) , subject to ctoday +cfuture (1+R) =ytoday +yfuture (1+R) \max _ { c _ { \text {tadoy } } \cdot c _ { \text {Murs } } } U = u \left( c _ { \text {today } } \right) + \beta u \left( c _ { \text {future } } \right) , \text { subject to } c _ { \text {today } } + c _ { \text {future } } ( 1 + R ) = y _ { \text {today } } + y _ { \text {future } } ( 1 + R )

Correct Answer:

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