Problem
Repeat worked-out problem 10.3 (page 346), but assume that in Angela's view, one kg of food this year is the perfect complement to one kg of food next year. In other words, assume that her indifference curves are L-shaped, and that the corner of the L in each curve lies on the 45-degree line. How would you interpret her preferences?
Problem 10.3
In each of the following cases, calculate the PDV of the specified amount under the specified circumstances.
a. $6,300 received in eight years, at an interest rate of 4 percent.
b. $115,000 received in two years, at an interest rate of 18 percent.
c. $45,000 received in 100 years, at an interest rate of 1 percent.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.