Which of the Following Expressions Illustrates the Point That Lifetime

question 16

Multiple Choice

Which of the following expressions illustrates the point that lifetime consumption (over a two-period framework) should equal lifetime earnings? Assume that the rate of interest is zero. C denotes consumption, W denotes wages, H denotes hours, and the subscript denotes the periods.

• A) C1 + W1H1 = C2 + W2H2
• B) C1 * C2 = W1H1 + W2H2
• C) C1 * C2 = W1 (H1 + H2)
• D) C1 + C2 = W1H1 + W2H2
• E) C1 + C2 = W1 (H1 + H2)

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