Presented below are changes in all the account balances of bramble furniture co. during the current year, except for retained earnings. increase (decrease) increase (decrease) cash $70,360 accounts payable $(52,610 ) accounts receivable (net) 48,300 bonds payable 84,270 inventory 133,900 common stock 134,700 investments (47,730 ) paid-in capital in excess of par—common stock 13,220 compute the net income for the current year, assuming that there were no entries in the retained earnings account except for net income and a dividend declaration of $23,000 which was paid in the current year.

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?