Fisher intertemporal choice a Intertemporal budget constraint 12 9 3 765 (1+r)X1+2 (1+F)Y1+Y2
Fisher & intertemporal choice ◼ Intertemporal budget constraint 1 2 (1+ r)Y +Y 1 2 (1+ r)Y +Y C1 C2
Fisher intertemporal choice a ls current money more valuable or 12 the future money? 9 3 765 C1+,=Y1+1+r 1+r
Fisher & intertemporal choice ◼ Is current money more valuable or the future money? r Y Y r C C + = + + + 1 1 2 1 2 1
Fisher intertemporal choice 12 Consumer Preferences 9 3 765 Indifference curves a curve that shows the combinations of 1st-pd and 2nd- pd c that make the consumer equally happy
Fisher & intertemporal choice ◼ Consumer Preferences Indifference curves: a curve that shows the combinations of 1st-pd and 2ndpd C that make the consumer equally happy