What is the intertemporal budget constraint for seth

Reference no: EM13197034

Seth could consume $120 next year if he saved all his current earnings. He expects to earn nothing next year. The intertemporal budget constraint for Seth is given by the equation C2 = 120 - 1.2C1 where C1 =possible consumption in year 1 and C2 = possible consumption in year 2. Assume that C1 is on the horizontal axis and C2 is on the vertical axis.

Seth will definitely consume zero in year 1 if his MRSC1 for C2 is less than __________at all points on his indifference curve.
Seth will definitely save nothing for next year if his MRSC1 for C2 is greater than ______at all points on his indifference curve.

Reference no: EM13197034

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