Question: Answer TWO Questions Question 1 Consider an agent who lives only for two periods (t1, t2) in an overlapping generations model with no money and

Answer TWO Questions Question 1 Consider an agent who lives only for two periods (t1, t2) in an overlapping generations model with no money and perishable endowment goods. The agent's endowment and consumption in the two periods are denoted by (on. 002) and (c1, C2) respectively. The rate of interest is rso that 5 units of saving in t1 will give (1 + r)s in t2. The agent has to choose level of consumption in each period so that the overall utility over the two periods is maximised. The agent's preference function is given as: 11161.62) = JCT + 6J5 , where 6

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