You plan on saving for a large home improvement project using the following cash flows: $50,000 today, $25,000 next year, and $10,000 the following year. if your savings account earns a 10% return per year, how much money will be available for the project after collecting the last payment?

How much of your paycheck do you have immediate access to once you deposit it into your bank account a. all of it b. a portion of it c. none of it

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?

Which of the following economic behaviors causes scarcity? a limited supply and unlimited demand b limited supply and unlimited credit c limited supply and limited regulation d limited supply and limited incentives