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:

Reinforcement

A process in which a behavior is strengthened by the outcomes that follow, leading to an increase in the likelihood of that behavior occurring in the future.

Running Speed

is the rate at which an individual or object moves across a distance, commonly measured in units of distance per time, such as meters per second.

Learned Helplessness

A state where an individual experiences feelings of being powerless, resulting from experiencing trauma or continuous lack of success.

Unavoidable Shocks

In psychological experiments, these are stress-inducing stimuli that the subject cannot escape, often used to study stress responses.