Kuznicki made a contract for the installation of a fire detection system by security safety corp. for $498. the contract was made one night and canceled at 9: 00 the next morning. security then claimed onethird of the purchase price from kuznicki by virtue of a provision in the contract that “in the event of cancellation of this agreement … the owner agrees to pay 33⅓ percent of the contract price, as liquidated damages.” was security safety entitled to recover the amount claimed? [security safety corp. v. kuznicki, 213 n. e.2d 866 (mass.)]

3. saving two consumers, larry and jeff, have utility functions defined over the two periods of their lives: middle age (period zero) and retirement (period 1). they have the same income in period 0 of m dollars and they will not earn income in period 1. the interest rate they face is r. larry’s and jeff’s utility functions are as follow. = 0.5 + 0.5 and = 0.5 + 0.5 for each person is between zero and one and represents each consumer’s temporal discount econ 340: intermediate microeconomics. ben van kammen: purdue university. rate. a. write the budget constraint that applies to both jeff and larry in terms of consumption in each period and ), interest rate, and m. b. what is larry’s and what is jeff’s marginal rate of intertemporal substitution? c. what is the slope of the budget constraint? d. write each consumer’s condition for lifetime utility maximization. e. re-arrange the conditions from part (d) to solve for the ratio, . f. if > which consumer will save more of his middle age income? g. if > 1 1+ , in which period will larry consume more: = 0 or = 1?