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

---

Definitions:

Legitimately

Legitimately refers to something conducted in accordance with established legal rules, principles, or standards.

Distributive Justice

A principle concerned with the fair allocation of resources among diverse members of a community.

Libertarian

A political ideology favoring minimal state intervention in the personal and economic affairs of individuals, emphasizing freedom and voluntary association.

Egalitarian

Based on the principle that all people are equal and deserve equal rights and opportunities.