Tom lives in two periods. In the first period, his income is fixed at $50,000; in the second, he gets a 8% raise in his income. He can borrow but cannot save at the market interest rate of 5 percent. Assume the next period consumption is put on the vertical axis). The vertical intercept of his intertemporal budget constraint is: dollars.

Tom lives in two periods. In the first period, his income is fixed at $50,000; in the second, he gets a 8% raise in his income. He can borrow but cannot save at the market interest rate of 5 percent. Assume the next period consumption is put on the vertical axis). The vertical intercept of his intertemporal budget constraint is: dollars.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 10P

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