52) Upon receiving notice from their electric utility that customers with solar power systems are permitted to sell excess power back to the utility, an Arizona family is considering the purchase of a photovoltaic solar energy system for their 2,700-square-foot suburban home. The initial costs of the systems they are considering range from $7,000 to $30,000. While gathering information prior to making a decision, the homeowners find the following information at the Web site of the United States Department of Energy. (a) Describe one environmental benefit and one environmental cost of photovoltaic systems. (b) From the two types of solar systems described on the government Web site, select the system (either stand-alone or grid-connected) that you think best meets the needs of the homeowners. Write an argument to persuade them to purchase the system you selected. Include the pros and cons of each system in your argument. (c) Describe TWO ways that government or industry could promote the use of photovoltaic power systems for homeowners in the future.

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?