You received a significant amount of donation D>0 and would like to use this money to run a charity program. Assume that you want the charity program to run for T periods, and you would like to spread the spending overtime. Let s, be the spending for period t. Denote de the funding available from the beginning of time t (do = D). The utility (happiness) you receive by helping others (spending st) can be summarized as T EB'u(st) t=0
You received a significant amount of donation D>0 and would like to use this money to run a charity program. Assume that you want the charity program to run for T periods, and you would like to spread the spending overtime. Let s, be the spending for period t. Denote de the funding available from the beginning of time t (do = D). The utility (happiness) you receive by helping others (spending st) can be summarized as T EB'u(st) t=0
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 15E
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Transcribed Image Text:You received a significant amount of donation D>0 and would like to use this money to run a charity
program. Assume that you want the charity program to run for T periods, and you would like to
spread the spending overtime. Let st be the spending for period t. Denote di the funding available
from the beginning of time t (do = D). The utility (happiness) you receive by helping others (spending
St) can be summarized as
B'u(st)
t=0
where 3 is the discount factor.
(3) Assume T = 3. Let u(s) = ln(s), solve the optimal s; for each period.
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