To Ensure a Well-Defined Solution to the Consumers' Intertemporal Choice

question 3

Multiple Choice

To ensure a well-defined solution to the consumers' intertemporal choice problems,we must assume that consumers' preferences exhibit the properties that

• A) they are all identical and that more is always preferred to less.
• B) more is preferred to less and that the consumer prefers diversity.
• C) the consumer likes diversity and that more is sometimes preferred to less.
• D) more is sometimes preferred to less and that first-period consumption and second-period consumption are both normal goods.
• E) more is sometimes preferred to less and that first-period consumption and second-period consumption are both inferior goods.

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Definitions:

Basic Economic Questions

Fundamental questions addressing what to produce, how to produce, and for whom to produce in an economy.

Income

The financial gain or money received by an individual or entity, typically through wages, investments, or sales.

Economic Organization

The structured and systematic arrangement of economic activities and resource allocations within a society or among participants in the economy.

Private Ownership

The legal possession of property by non-governmental entities or individuals, allowing control over its use and the benefits it generates.