Agan interior design provides home and office decorating assistance to its customers. in normal operation, an average of 2.5 customers arrive each hour.
one design consultant is available to answer questions and make product recommendations. the consultant averages 10 minutres with each customer.

a. compute the operating characteristics of the customers wiating line, assuming posson arrivals and exponential service times.

b. service goals dictate that an arriving customer should not wait for service more than an average of 5 minutes. is this gaol being met?

c. if the consultant can reduce the average time spent per customer to 8 minutes, what is the mean service rate? will the service goal be met?

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?