Read the article by Carroll Requiem for the Representative Consumer? Aggregate Implications of
Microeconomic Consumption Behavior and answer the following questions.
1. What is heterogeneity?
2. What is homogeneity?
3. What is precautionary savings?
4. How does MPC change as the wealth level of consumers change?
5. What is representative consumer?
6. What is a typical consumer?
7. What is the difference in wealth level for typical versus representative consumers?
8. What is the difference between patient and impatient consumers?
9. Compare the wealth level of patient and impatient consumers (the same, different – based on the article)
10. What is idiosyncratic risk?