Consider the two-period model. The consumerís preferences over current and future consumption (c and c 0 ) are: REFER TO IMAGE FOR NEXT STEP  (a) Find lifetime wealth, we. (b) Set up the Lagrangian and FINDd the optimal levels of current consumption (c), future consumption (c')
and saving (y-t-c) c) Confirm that the allocation you found in part (b) is in fact optimal, by completing the following table. refer to second image

10. Suppose in our model, lifespans increased due to a productivity in- crease. What would likely happen to hours worked and leisure over the lifetime of a represent ative consumer. (a) Let's consider one of two common ways of implementing this change. Suppose the increase raised both lifespans and the amount of years consumers are healthy enough to work by the same amount, how would that likely affect the measured numbered of hours work by prime aged adults within a given year? What would likely hap- pen to the retirement age? (b) Let's consider the other way to implement it. Suppose the change in lifetimes came about changes in technology that delayed death but did not extend the amount of years consumers are healthy enough to work. What would likely happen to hours worked within a year? What would happen to the retirement age? (c) In the US, the generalized stylized fact is that the actual age of retirement is not increasing. Nor are hours worked per week. Why are both of the above…

Q12

Q2  Solve 2 parts