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Matt and Ted each live for four periods, t = 1, 2, 3, 4. At the end period 4, they retire and consume whatever wealth they have amassed. Their utility for wealth is given by u(w) = w. They do not consume in periods 1-3. At the beginning of period 1, both have $100 to […]
Rachel’s preferences for goods x and y are represented by the following utility function: U(QX, QY ) = Q 1/4 X Q 3/4 Y . (a) Find the expression of the marginal rate of substitution in terms of QX and QY . Comment whether it is increasing, constant or decreasing in QX. (b) Find the […]
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