1。Assume you are in an isolated island where storage is the only investment opportunity. There is no capital market. Given the utility function U (C0, C1) =ln C0+βln C1, and the endowment (y0, y1). Describe two period utility-maximized decision of consumption (C0, C1)。

2。Given the power utility function:

Discount factor β=0.8, expected endowment growth rate g=20%.
(1) Calculate the equilibrium real discount price qt
(2)At date t+1, the expected price and dividend of a stock are 5.8 and 0.4. Calculate the equilibrium price at date t.