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

question 38

Multiple Choice

Harvey Habit has a utility function U(c₁, c₂) = min{c₁, c₂}, where c₁ and c₂ are his consumption in periods 1 and 2 respectively.Harvey earns $147 in period 1 and he will earn $63 in period 2.Harvey can borrow or lend at an interest rate of 10%.There is no inflation.

• A)Harvey will save $102.
• B)Harvey will borrow $40.
• C)Harvey will neither borrow nor lend.
• D)Harvey will save $40.
• E)None of the above.

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Definitions:

Speech Development

The process by which children learn to communicate through spoken language, from babbling as infants to forming complete sentences.

Telegraphic Speech

describes the early stage of child language development, characterized by simple two-word sentences that communicate a clear message with minimal words.

Grammatical

Pertaining to the rules and structures that govern the composition of phrases, clauses, and sentences in any given language.

Dangling Participles

A grammatical error occurring when a participle or participial phrase does not logically or grammatically link to the noun it is intended to modify, often leading to confusion or a humorous reading.