Question: How exactly do I solve part c? (sorry I highlighted a by mistake) How should I even think about approaching this problem anyway? on 1+;-
How exactly do I solve part c? (sorry I highlighted a by mistake)
How should I even think about approaching this problem anyway?

on 1+;- glg[\"'(iicl and for myopic households prefer-ces are the same, just replacing q and It, by cl" and ii" respectively. While the budget constraint for optimizing households is the same as the one we saw in class, the budget constraint for myopic households is =m$ such that these individuals do not save or invest- (b) {19 point} Solve the problem of the representaiive rm with production function l'; = K,\" (AtLt) Ht. Write the equilibrium conditions for this economy (taking into account that there are two types of individuals). Then use the optimality conditions of the households and the rm and plug them into the eq1librium {marketclearing) conditions. How does p affect the equilibrium in this economy? (c) {10 points) Solve for the equilibrium dynamics assuming that 5 = l. nt: You need to use the guessandverify trick- The appropriate state variable is lag, the capital stock owned by the optimizing households. The goal is to nd expressions that give kt\
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