The table below shows the domestic supply and demand schedule for rice in Thailand. Price of rice ($/kg) Quantity demanded (millions kg) Quantity supplied (millions kg)
3.5 2,100 3,300
3.25 2 150 3,200
3 2,200 3,100
2.75 2,250 3,000
2 50 2 300 2,900
1.25 2,350 2,800
1 00 2,400 2,700
0.75 2,450 2,600
0.25 2,500 2,500

Required:
a. In autarky, the domestic quantity supplied is million kilograms and the price is $ per kilogram.
b. The world price of rice is $1.25 per kilogram. (Hint: You can assume Thailand is a small producer of rice relative to the world market.) If Thailand opens up to trade in rice, the new domestic price of rice will be $ per kilogram.
c. million kilograms of rice will be supplied by domestic producers.
d. million kilograms of rice will be demanded by domestic consumers.
e. Thailand will million kilograms of rice.

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?