Quick Econ 359 Question - HELP!!!

[Weapon_R]

I totally blanked out and can't find this anywhere:


"A consumer lives for two periods and receives an income of 20 in each period. The real rate of interest is R=10%. Write down her utility maximizing choices of first and second period consumption for each of the following utility functions:

a) U=C1^0.4 * C2^0.6

b) U=C1 + C2

c) U= min {c1, c2}

C1=period 1

C2=Period 2

Any help would be awesome

[Davetronz]

What the fuck....
I can design complex electrical circuits but I have NO idea what you just said!

[EstoMax]

so if each c is worth 20 just replace c1 and c2 with 20 right?
this seems too easy tho..

[RSeXy]

..and that is why i am not an econ major! LOL

[Weapon_R]

Originally posted by Lt. Max
so if each c is worth 20 just replace c1 and c2 with 20 right?
this seems too easy tho..

I thought that was the only way to do it, but it seems too fucken easy. Thats why i'm worried...

[max_boost]

Where is resident Kenny or B17A.....Econ majors

[B17a]

Originally posted by max_boost
Where is resident Kenny or B17A.....Econ majors

I took that shit too long ago to remember or care anymore, sorry dude! Since it has zero practical use, I have completely expunged all info from my brain.

[mwmhong]

Originally posted by Weapon_R
I totally blanked out and can't find this anywhere:


"A consumer lives for two periods and receives an income of 20 in each period. The real rate of interest is R=10%. Write down her utility maximizing choices of first and second period consumption for each of the following utility functions:

a) U=C1^0.4 * C2^0.6

b) U=C1 + C2

c) U= min {c1, c2}

C1=period 1

C2=Period 2

Any help would be awesome

Hmm.

So the guy makes 20 a year for 2 years and what he doesn't consume is what he invests @ 10% right?

So for (a) it could be:

U= [(C1^0.4) * (C2^0.6)]+ {(20-C1)*0.10)}+{(40-C1-C2)*0.10}

U=[Formula for consumption]+{Year one interest}+{Year 2 Interest}

Solve for C1 and C2 to maximize U?

[CLiVE]

Originally posted by B17a


I took that shit too long ago to remember or care anymore, sorry dude! Since it has zero practical use, I have completely expunged all info from my brain.

I took that almost 6 years ago now. I think I'll sit back and let someone else solve it. I would help....but I don't want to. lol.

[B17a]

Originally posted by memystealthandi


I took that almost 6 years ago now. I think I'll sit back and let someone else solve it. I would help....but I don't want to. lol.

Sorry WeaponR, BTW, who's your prof? I vaguely remember that class being taught as though it was a calculus course rather than an econ. I didn't get too many utils out of that class, that's for sure!!

[CLiVE]

Originally posted by B17a


Sorry WeaponR, BTW, who's your prof? I vaguely remember that class being taught as though it was a calculus course rather than an econ. I didn't get too many utils out of that class, that's for sure!!

haha, were you in the "C's get degrees" program?

[98type_r]

when is this due? i can consult my notes when i get home

[Weapon_R]

It's done and over but to answer the question...

It had nothing to do with utils, it was a complete calculus question.

Had to differentiate C1 wrt to c2 and set the two equal, and then find the value of C1, and then plug the value back into the original equation to find out C2...

[Weapon_R]

Originally posted by B17a


Sorry WeaponR, BTW, who's your prof? I vaguely remember that class being taught as though it was a calculus course rather than an econ. I didn't get too many utils out of that class, that's for sure!!

Prof is Dr. Coe, and yes its mainly a calculus course with a bit of econ in there...

I hate calculus

[Davetronz]

Originally posted by Weapon_R
It's done and over but to answer the question...

It had nothing to do with utils, it was a complete calculus question.

Had to differentiate C1 wrt to c2 and set the two equal, and then find the value of C1, and then plug the value back into the original equation to find out C2...

Dammit, why didnt you tell me it was calculus! U had to go and confuse me with the rest of the stuff when I could have solved it calculus methods!

[B17a]

Originally posted by Weapon_R


Prof is Dr. Coe, and yes its mainly a calculus course with a bit of econ in there...

I hate calculus

Watch out for Dr. Wen, that guy is not human, he's some sort of econ/calculus Terminator!

[98type_r]

Coe is worse IMO but i've never had WEN... yet...
Everybody in my 303 class hated the course. EVERYBODY showed up on instructor evaluation day just to give him a bad review.

[hinggu]

Yeah, I heard Wen is psycho! I took 359 with Atkins and it was alright

[B17a]

Originally posted by 98type_r
Coe is worse IMO but i've never had WEN... yet...
Everybody in my 303 class hated the course. EVERYBODY showed up on instructor evaluation day just to give him a bad review.

Same thing happened for Wen when (haha no pun intended) I had him. It was his first semester at UofC, boohoo for him. Coe is tough too, I had him for some 400-level course, we had some paper or Purchase price parity for some foreign currency, let me tell you, I have never been so lost as to what to do. I asked for help and I came out more confused. good luck to you!

[Weapon_R]

Yeah Coe is a hard prof. His tests are tough and his assignments are even worse. And his British accent bugs me.