Suppose That Molly from Problem 2 Had an Income of $400

question 30

Multiple Choice

Suppose that Molly from Problem 2 had an income of $400 in period 1 and an income of $690 in period 2. Suppose that her utility function were c^a₁c^1-a₂, where a = 0.80 and the interest rate were 15%. If her income in period 1 doubled and her income in period 2 stayed the same, her consumption in period 1 would

• A) stay constant.
• B) increase by $320.
• C) increase by $160.
• D) double.
• E) increase by $400.

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Definitions:

Deindividuation

A psychological state characterized by lowered self-awareness and decreased concern for social evaluation, often leading to uncharacteristic behavior within a group setting.

Group Situations

Circumstances or environments in which individuals interact within a collective or group setting.

Social Facilitation

Definition: The tendency for people to perform better on tasks when they are in the presence of others, due to the arousal elicited by being watched.

Easy Puzzles

Simple or solvable problems that require minimal cognitive effort to resolve.