To Ensure a Well-Defined Solution to the Consumers' Intertemporal Choice

question 43

Multiple Choice

To ensure a well-defined solution to the consumers' intertemporal choice problems, we must assume that consumers' preferences exhibit the properties that

• A) they are all identical and that more is always preferred to less.
• B) more is preferred to less and that the consumer prefers diversity.
• C) the consumer likes diversity and that more is sometimes preferred to less.
• D) more is sometimes preferred to less and that first-period consumption and second-period consumption are both normal goods.
• E) more is sometimes preferred to less and that first-period consumption and second-period consumption are both inferior goods.

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Definitions:

Utilitarian View

An ethical philosophy that posits the best action is the one that maximizes utility, typically defined as that which produces the greatest well-being of the greatest number of people.

Greatest Good

A principle often associated with utilitarianism, focusing on actions that aim to maximize happiness or benefit for the greatest number of people.

Terminal Values

Deeply held beliefs or goals that individuals consider as their ultimate life objectives.

Instrumental Values

These are values that are seen as a means to an end, guiding individuals on how to reach their goals or desired outcomes.