Abond's is generally $1,000 and represents the amount borrowed from the bond's first purchaser. a bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue's restrictive covenants. a bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a a bond's gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions. if the price of the bond is initially discounted and offers no coupon payments, the bond is called a bond. the contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called the issuers can gradually reduce the outstanding balance of a bond issue by using a sinking fund account into which they deposit a specified amount of money each year.

Which of the following describes a situation in which there would be decreasing marginal utility? a. buying only necessities. b. buying a car to substitute for riding the bus. c. buying food in bulk to save money in the long run. d. buying a second winter coat.

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?

What effect, considered related to the secondary effect of advertisement, occurs as an advertisement begins to lose its impact when it gets old? the makes the advertisement lose its impact after it gets old.