A consumer's behavior is described by the equation Y, C+ S, where Y, C, and S,...

 

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A consumer's behavior is described by the equation Y, C₁+ S, where Y₁, C, and S, stand respectively for his income, consumption and saving at the time period t. We assume that S₁ =Y+1+717√3 and CY, at any time period t. 1. Show that the consumer's consumption satisfies the equation: 2 marks C₁₁ = 2√3 Ct C-1-1912 2. Compute the consumer's initial income and initial savings, as well as his consumption in period 1 knowing that Co = 1206√/3. 2 marks 3. Determine the consumer's consumption over time. 2 marks 4. What would the consumer's consumption, savings, and income be in the long run? 3 marks A consumer's behavior is described by the equation Y, C₁+ S, where Y₁, C, and S, stand respectively for his income, consumption and saving at the time period t. We assume that S₁ =Y+1+717√3 and CY, at any time period t. 1. Show that the consumer's consumption satisfies the equation: 2 marks C₁₁ = 2√3 Ct C-1-1912 2. Compute the consumer's initial income and initial savings, as well as his consumption in period 1 knowing that Co = 1206√/3. 2 marks 3. Determine the consumer's consumption over time. 2 marks 4. What would the consumer's consumption, savings, and income be in the long run? 3 marks

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1 To show that the consumers consumption satisfies the equation C 23C1 1912 we substitute the given ... View the full answer