Harvey Habit Has a Utility Function U(c₁, C₂)= Min{c₁

question 21

Multiple Choice

Harvey Habit has a utility function U(c₁, c₂) = min{c₁, c₂}.If he had an income of $1,290 in period 1 and $860 in period 2 and if the interest rate were 15%, how much would Harvey choose to spend on bread in period 1?

• A)$1,635
• B)$363.33
• C)$545
• D)$2,180
• E)$1,090

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Definitions:

Automatic Behaviors

Actions that are performed without conscious thought or intention, often as a result of habit or conditioning.

Social Comparison

The process of evaluating oneself by comparing with others, which can influence self-esteem and self-perception.

Performance Feedback

Evaluative information provided regarding the efficacy or quality of an individual's work output or performance.

Family Experience

The unique set of relationships, dynamics, traditions, and interactions one has within their family unit, influencing identity and behavior.