Question: Please answer this problem for me. Thank you very much. 2. Recall the Lucas tree model. The price of the asset at time t can

Please answer this problem for me. Thank you very much.

2. Recall the Lucas \"tree\" model. The price of the asset at time t can be expressed as pt=Et 2 33 u'Est) Yt+s:| . (1) u (311:) (Note that yt = Yt.) (a) Suppose that the utility function is linear: u(ct) = act where a > 0. How does the formula (1) look like in this case? (b) Suppose that the utility function is u(ct) = Cl_9 / (1 0) where 9 > 0. How does the formula (1) look like in this case? Is Pt increasing or decreasing in Yt+s

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