You are currently an economics major in college.According to a recent study,you will earn about $98,000 in the future.But as a college student,working for McDonald's,you are only pulling in $15,000 today.You also have high school graduation gifts,assets worth $10,000.Suppose that the real interest rate is 5%,
,and utility is logarithmic.
a.What is your human and total wealth?
b.What is your consumption today? In the future?
c.What happens to your consumption if,rather than making $98,000,you make $102,000 in the future?
d.From your results,what does this suggest about being able to access credit markets?

Question

You are currently an economics major in college.According to a recent study,you will earn about $98,000 in the future.But as a college student,working for McDonald's,you are only pulling in $15,000 today.You also have high school graduation gifts,assets worth $10,000.Suppose that the real interest rate is 5%,  
,and utility is logarithmic. 
a.What is your human and total wealth?
b.What is your consumption today? In the future?
c.What happens to your consumption if,rather than making $98,000,you make $102,000 in the future?
d.From your results,what does this suggest about being able to access credit markets?

Quizplus · Accepted Answer

The Answer of You are currently an economics major in college.According to a recent study,you will earn about $98,000 in the future.But as a college student,working for McDonald's,you are only pulling in $15,000 today.You also have high school graduation gifts,assets worth $10,000.Suppose that the real interest rate is 5%,  
,and utility is logarithmic. 
a.What is your human and total wealth?
b.What is your consumption today? In the future?
c.What happens to your consumption if,rather than making $98,000,you make $102,000 in the future?
d.From your results,what does this suggest about being able to access credit markets?

You Are Currently an Economics Major in College