Yes. The rate at which the two friends will consume will be optimal. Consider that one of the friend say defined A consumes as a rate faster than the friend B. Now of the friend A starts to consume at a rate less than that of B, then B would be better off but friend A,she will be worse off because she would get lesser share. There exist no other situation where one person can be made better off without hurting the other person. Thus there will be no tendency for her to deviate and the rate is optimal.
Likewise for the other friend.
Given that they are self interested, the rates will be optimal.
You and your best friend have a craving for bubble tea and have agreed to share...
You and your best friend, whom you have known since the 5th grade, have decided to make your childhood dreams a reality by starting a business together. You graduated business school with an MBA while your best friend recently earned an advanced degree in engineering. The company will design and manufacture revolutionary tailgating furniture that is made from a new composite material that has been recently patented by your best friend. With this new material, the furniture will fold and...
You and your best friend are both majoring in accounting, and the two of you have had several courses together throughout your studies. Due to a scheduling conflict, you're on your own in the auditing class, and loving the content so far! As you try to explain the class to your friend, it becomes clear that he doesn't really understand the audit process. He asks you the following questions: Isn't it the auditor's job just to check the numbers and...
Suppose you have two clients who need your services for two years. One agreed to pay you $40,000 one year from now and another $40,000 in two years while the other paid $35,000 after one year, but $55,000 after two years. Assuming an interest rate of 5%, which one has a higher present value? Round off to the nearest dollar.
Journal Entry # 1 Choose one of the topics below: Why is your best friend your best friend? How did you meet? How did your relationship develop and grow? How do you see your friendship in the future? 1. If you saw a movie about your life, what would the title be and why? What would the genre be? (Drama, Romance, Mystery, Horror, Thriller, Action, Inspirational, Comedy, Tragedy, etc.) Why? 2.
Journal Entry # 1 Choose one of the topics...
Suppose that you and a friend are discussing the effects of pollution on society. Your friend argues that the best level of emissions for society as a whole is zero. Your friend argues that zero emissions would cause zero environmental damage to society and would, therefore, be optimal. a) Explain using the tools of economic analysis from class, show that the optimal level of emissions is generally not zero. Show how the optimal level of emissions is determined for any...
You have worked at the same company with your best friend for the last 10 years—in fact, he told you about the job and got you the interview. He works in the marketing department and is up for a promotion to marketing director—a position he has been wanting for a long time. You work in sales, and on your weekly conference call, the new marketing director—someone recruited from outside the company—joins you. Your boss explains that although the formal announcement...
Imagine you win $25 million playing the lottery. You, in all your glory, decide that you will donate the money to revitalizing the US economy which is—at the time of your win—in a recession. You can choose to give your money to one of two groups. The first group—Group Albatross—has a marginal propensity to consume of 0.8. The other group—Group Bonobo—has a marginal propensity to consume of 0.3. If your goal is to jumpstart the economy, which group are you...
Consider the following hypothetical example: Your friend has a long video lecture to watch but they are behind on other work and want to view it at a faster rate. They aren’t sure how long it will end up taking them to watch the video and ask for your help. Share how you would explain to your friend how to find the new viewing time assuming they have not taken this course? Would your response differ if they had taken this...
As a current MBA student, your friend has thought it best to contact you for some retirement advice. He would like to retire in exactly 40 years. Your friend has the following retirement goals: Once he has retired, he would like to be able to withdraw R1,000,000 per year for 25 years in order to live comfortably (assume withdrawals are made at the end of each period). He would also like to leave an inheritance of R2,000,000 for his family...
You have the following data T2 T3 and the true DGP is: Your friend calculated two estimates of ^: ^1- 1 and B2 2 (a) Find the sum of squared residuals for A1. (hint: you should get an actual number) ind the sum of squared residuals for ß2. (hint: you should get an actual number) (c) Which one of these two estimates is more likely to be the OLS estimate of 3? Why? (d) Find the estimate of β that...