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SOLVED: Problem 2: Consider a representative consumer whose preferences over consumption and leisure are given by the following utility function:U(C,1) = U(C) V()(2where U (. and V(.) are twice differentiable functions (that is, their first and second derivatives exist) . Suppose that this consumer faces lump-sum taxes, T, and receives dividend income, II, from the 100% ownership of shares of the representative firmA) Write down the consumer'optimization problem and the first-order conditions d
SOLVED: Problem 2: Consider a representative consumer whose p…
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