Intertemporal Budget Constraint

question 27

Multiple Choice

Intertemporal Budget Constraint
-Given the table above,the present value of lifetime resources ________ when the real interest rate rises to five percent.

• A)falls by $367
• B)rises by $200
• C)rises by $300
• D)falls by $275

---

Definitions:

Coffee Sales

The volume or quantity of coffee sold within a given period.

Total Revenue

The complete amount of income generated by the sale of goods or services before any costs or expenses are subtracted.

Perfectly Price Elastic

A market situation in which demand or supply responds infinitely to changes in price, meaning any tiny price change results in an infinite quantity demanded or supplied.

Demand

The quantity of a good or service consumers are willing and able to purchase at various prices during a given period.