Over spring break, you go to florida and accidentally spend too much on your checking account's debit card. when you get back to school, you are shocked to see you owe your bank $220, which you pay back immediately. however, you have not even had time to recover from your sunburn before the bank informs you that, pursuant to the liquidated damages clause in the contract you signed when you opened the account, you are being charged a $55 "overdraft fee" for every transaction you made on your debit card after your balance was $0. unfortunately, you made nine such transactions, which means you owe the bank an additional $495 in fees (9 x $55 = $495). what is your best argument against the overdraft fees?

What two things do you consider when evaluating the time value of money

Which of the following is one of the five fundamental questions? which products will be in scarce supply and which in excess supply? who should appoint the head of the central bank? how much should society save? correct what goods and services will be produced?

3. saving two consumers, larry and jeff, have utility functions defined over the two periods of their lives: middle age (period zero) and retirement (period 1). they have the same income in period 0 of m dollars and they will not earn income in period 1. the interest rate they face is r. larry’s and jeff’s utility functions are as follow. = 0.5 + 0.5 and = 0.5 + 0.5 for each person is between zero and one and represents each consumer’s temporal discount econ 340: intermediate microeconomics. ben van kammen: purdue university. rate. a. write the budget constraint that applies to both jeff and larry in terms of consumption in each period and ), interest rate, and m. b. what is larry’s and what is jeff’s marginal rate of intertemporal substitution? c. what is the slope of the budget constraint? d. write each consumer’s condition for lifetime utility maximization. e. re-arrange the conditions from part (d) to solve for the ratio, . f. if > which consumer will save more of his middle age income? g. if > 1 1+ , in which period will larry consume more: = 0 or = 1?