Edward Would Be Equally Happy with Receiving $95 Today or $100

question 20

Multiple Choice

Edward would be equally happy with receiving $95 today or $100 one year from today.  Edward's friend Bella would be just as happy receiving $90 today or $100 one year from today. Based on this information, which of the following best describes the difference between Edward and Bella?

• A)Edward has a higher rate of time preference than Bella.
• B)Bella has a higher rate of time preference than Edward.
• C)Edward is in more urgent need of money today.
• D)Bella is more easygoing about her finances.

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Definitions:

Environmental Influences

The various external factors that can impact an individual's behavior, development, and life outcomes, including social, cultural, and physical environments.

Narcissistic Trait

A personality characteristic involving an inflated sense of self-importance, need for admiration, and lack of empathy for others.

Oedipus Complex

The Oedipus complex is a concept in psychoanalytic theory referring to a child's unconscious sexual desire for the opposite-sex parent and jealousy and rivalry toward the same-sex parent.

Reality Principle

A psychoanalytic concept that refers to the ability of the ego to address the demands of the environment in a realistic manner, balancing the id's desires with the external world's constraints.