Jose consumes wallets (q1 ) and a composite of other goods (q2 ). The price of wallets is p1 and the price of other goods is p2 = 1
Jose's utility from wallets depends also on his income—with a higher income, he values a wallet more because he has more to put inside it! His utility is given by the equation U(q1,q2 ) = q1Yq2 Derive Jose's demand for wallets.
q1* = Y/(1 + Y)p1
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Suppose you put $500 in your savings account and earn 4% interest per year. How much will you have in your account after two years? Be sure to round off to the nearest cent
What will be an ideal response?
Fogel (1964) came up with two estimates of social savings (? and ?). What do they represent?
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