Patience Has a Utility Function U(c₁, C₂) C^1/2₁ + 0

question 30

Multiple Choice

Patience has a utility function 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.Her income in period 1 is twice 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)0.40
• B)0.10
• C)0.20
• D)0
• E)0.30

---

Definitions:

Visionaries

Individuals known for their innovative ideas and foresight in predicting and planning for future trends or changes.

Visual Processing

The ability of the brain to interpret and make sense of visual information seen through the eyes.

Charismatic Leader

A leader who inspires and motivates others through their personal charm, persuasion, and powerful personality.

Perceptive Questions

Inquiries crafted to elicit meaningful information, often revealing deeper insights or encouraging critical thinking.