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Economics university question. Help please x
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hannah04jones
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An investor with an initial endowment of $ 16,000 is confronted with the following productivity curve:
C1= 240 (16,000 − C0)^0.5
where C0 denotes consumption at present, and C1 consumption in the future. Assume the interest rate (for borrowing and lending) is 20%. The investor's utility function, from which it is possible to derive his indifference curves, is defined as:
U(C0, C1) =C0C1
How much will the investor invest in production?
The options are: $16 000, $12 000, $10 000, $0
C1= 240 (16,000 − C0)^0.5
where C0 denotes consumption at present, and C1 consumption in the future. Assume the interest rate (for borrowing and lending) is 20%. The investor's utility function, from which it is possible to derive his indifference curves, is defined as:
U(C0, C1) =C0C1
How much will the investor invest in production?
The options are: $16 000, $12 000, $10 000, $0
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