scenario: yasmin and zeek are lawyers working at v, w, and x llp. yasmin works 48 hours a week, and zeek also works 48 hours a week. they handle two types of cases, intellectual property (ip) cases and corporate fraud (cf) cases. it takes yasmin 6 hours to handle each ip case and 4 hours to handle each cf case. zeek can finish an ip case in 3 hours and a cf case in 6 hours. suppose that the two lawyers' boss wants the total number of ip cases worked on by them to equal the total number of cf cases worked on by them. so long as the total number of ip cases equals the total number of cf cases, their boss does not care which lawyer works on how many of which type of case. so yasmin and zeek decide to take advantage of their comparative advantages. how would they divide the tasks? a. yasmin specializes in ip cases, while zeek works on both types of cases. b. yasmin specializes in cf cases, while zeek specializes in ip cases. c. yasmin specializes in cf cases, while zeek works on both types of cases. d. yasmin specializes in ip cases, while zeek specializes in cf cases.

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?