Activity Normal Time Normal Cost Crash Duration Crash Cost A 9 days $8,000 7 days $12,000
B 5 days $2,000 3 days $10,000
C 12 days $9,000 11 days $12,000

Required:
a. What is the crash cost per unit time for activity A?
b. What is the crash cost per unit time for activity B?
c. Which activity should be crashed first to cut one day from the project's duration; how much is added to project cost?
d. Which activity should be the next activity crashed to cut a second day from the project's duration; how much is added to project cost?
e. Assuming no other paths become critical, how much can this project be shortened at what total added cost?

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?