Question: What is the optimal saving that maximizes the representative consumer's lifetime utility? Consider the following two-period problem for the representative consumer Y1 = 50 T1

What is the optimal saving that maximizes the representative consumer's lifetime utility?

Consider the following two-period problem for the representative consumer Y1 = 50 T1 = 10 Y2 = 40 T2= 7 r = 0.10 C, = consumption in the first period C, = consumption in the second period S = saving in the first period U(C1, C2) = 3 In(C1) + 2 In(C2) What is the optimal saving, S*, that maximizes the representative consumer's lifetime utility? O A. +8 OB. +12 OC. -2 OD. -8 O E. None of the above

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