Vanessa's Utility Function Is U(c¹, C²)= C^1/2₁ + 0

question 41

Multiple Choice

Vanessa's utility function is U(c¹, c²) = c^1/2₁ + 0.83c^1/2₂, where c₁ is her consumption in period 1 and c₂ is her consumption in period 2.In period 2, her income is 4 times as large as her income in period 1.At what interest rate will she choose to consume the same amount in period 2 as in period 1? (Choose the closest answer.)

• A)0.10
• B)0
• C)0.30
• D)0.80
• E)0.20

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Definitions:

Co-Lead

Acting as a joint leader or facilitator in a group or project, sharing the leadership role with another individual.

Strong Reactions

Intense emotional or physical responses to stimuli or situations, often unexpected or powerful.

Termination

The process of ending or concluding a project, relationship, or agreement.

Program Activities

Specific actions, tasks, or events designed to achieve the objectives of a program or initiative.