Patience Has a Utility Function U(c₁, C₂) , Where

question 23

Multiple Choice

Patience has a utility function U(c₁, c₂) , where c₁ is her consumption in period 1 and c₂ is her consumption in period 2. Her income in period 1 is 2 times as large as her income in period 2. At what interest rate will she choose to consume the same amount in period 1 as in period 2?

• A) 0
• B) 0.08
• C) 0.30
• D) 0.15
• E) 0.23

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Definitions:

REM Sleep

A phase of sleep characterized by rapid eye movements, more dreaming, and bodily movement; considered important for emotional and cognitive restoration.

Non-REM Sleep

A phase of sleep characterized by slower brain waves and reduced eye movement, distinct from REM (Rapid Eye Movement) sleep.

Rapid Eye Movement

A phase of sleep characterized by quick, random movements of the eyes, associated with vivid dreaming and increased brain activity.

Narcolepsy

A disorder involving sudden and unpredictable daytime attacks of sleepiness or lapses into REM sleep.