Abc audio sells headphones and would like to earn after tax profit of $400 every week. each set of headphones costs $5 and is sold for $10. they also incur costs of $200 for rent and other fixed costs, and their tax rate is 20%. how many headphones must they sell per week to meet this goal? abc audio sells headphones and would like to earn after tax profit of $400 every week. each set of headphones costs $5 and is sold for $10. they also incur costs of $200 for rent and other fixed costs, and their tax rate is 20%. how many headphones must they sell per week to meet this goal?

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?