題組內容

3. Robin Crusoe lives for two periods and his diet consists solely of fish. His utility function is given by U = C0C1, where C0 denotes consumption of fish in period 0 and C1, denotes consumption of fish in period 1. The current stock of fish is 300. The growth rate of the fish is 100% (i.e., foregoing consumption of one fish in period 0 means Robin can consume 2 fish in period 1 )

Suppose a capital market opens, which allows Robin to borrow or lend with the April Crusoe on the other islands. The borrowing and lending rate is r = 0.2.
(b) What is the present value of Robin’s wealth assuming he uses the optimal production plan? (5 points)