Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 16, Problem 1RQ
To determine
Key building blocks of neoclassical consumption model.
Expert Solution & Answer
Explanation of Solution
The model of neoclassical consumption is based on some assumptions, which are listed as follows:
- 1. The consumer will derive his or her utility from their life time consumption based on their total life time income.
- 2. People have the freedom to choose the commodity based on their taste and preference.
- 3. The consumer will always try to maximize his or her utility.
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Chapter 16 Solutions
Macroeconomics (Fourth Edition)
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