Home » Stephanie has just finished high school, and expects to live two more periods, period 1 and period 2. She has two career paths open to her:

Stephanie has just finished high school, and expects to live two more periods, period 1 and period 2. She has two career paths open to her:

I need help with this question!

1. Stephanie has just finished high school, and expects to live two more periods, period

1 and period 2. She has two career paths open to her: under path A she can enter the

work force and start earning money immediately; under path B she can go to college

in period 1 at a cost and work in period 2. If she chooses option A, she will earn

$50,000 in each period. Under option B, she pays a cost of $150,000 in period 1 but

earns $300,000 in period 2. Stephanie can borrow and save at an interest rate r.

a. For what value of r will Stephanie be indifferent between career paths A and

B?

b. Let v(c) be an increasing and concave function, and suppose Stephanies

preferences over consumption in period 1 and 2 are described by the utility

function u(c1,c2)= v(c1)+ v(c2). If the interest rate is zero, how much will

Stephanie borrow in period 1, and what will her consumption in the two

periods be?

Show more







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10