Question: A single-owner firm faces a two-period planning problem with the transformation curve ????1^2 + ????2^2 =8 and initial resources equalling 1. Assume the market interest

A single-owner firm faces a two-period planning problem with the transformation curve ????1^2 + ????2^2 =8 and initial resources equalling 1. Assume the market interest rate is 5%.

Work out the firm's initial wealth maximization problem and illustrate your answer in a diagram.

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