If a Person Completely Smooths Consumption Over His Lifetime,then Consumption

question 68

Multiple Choice

If a person completely smooths consumption over his lifetime,then consumption is best represented by which of the following?

• A) wealth / the number of years the person expects to live
• B) lifetime income / the number of years the person expects to work
• C) (wealth + lifetime income) / the number of years the person expects to live
• D) (wealth + lifetime income) / the number of years the person expects to work

---

Definitions:

Profit-maximizing Output

The level of production at which a firm's marginal cost equals its marginal revenue, leading to the highest possible profit.

Cournot Model

A model of oligopoly in economics where competing firms simultaneously and independently decide on the quantity of production, leading to a strategic interaction.

Maximize Revenues

Strategies or actions taken by a business to increase its total income from sales or other sources as much as possible.

Cartel

An agreement among competing firms to control prices or exclude entry of a new competitor in a market, often to maximize their collective profit.