# optimal consumption problem (2 period model of consumption)

• February 20th 2011, 07:31 AM
situation
optimal consumption problem (2 period model of consumption)
hey I understand the cobb-douglas function but im unsure how you apply the concept to the question given below:

"Solve the optimal consumption problem analytically using the following Cobb-Doublas utility function: $
U=C^{\alpha}_1
C^{1-{\alpha}}_2$
Subscripts 1 and 2 denote present (young) and future (old) periods and $\alpha$ and $1- {\alpha}$ denote the weighted time preferences for these two periods respectively. "

cheers (Nod)
• February 21st 2011, 10:30 AM
SpringFan25
Can you state the optimisation problem?