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

question 50

Multiple Choice

Harvey Habit has a utility function U(c₁, c₂) =min{c₁, c₂}.If he had an income of $1,230 in period 1 and $615 in period 2 and if the interest rate were 0.05, how much would Harvey choose to spend on bread in period 1?

• A)$1,860
• B)$465
• C)$1,395
• D)$310
• E)$930

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Definitions:

Automobile

A wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables, ranging from -1 to 1.

Relationship

The manner through which two or more ideas, items, or individuals are linked, or the condition of being linked.

Variables

Elements, features, or factors that are likely to vary or change from one situation to another in an experiment or study.