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

question 12

Multiple Choice

Harvey Habit has a utility function U(c1, c2) =min{c₁, c₂}.If he had an income of $880 in period 1 and $1,320 in period 2 and if the interest rate were 0.20, how much would Harvey choose to spend on bread in period 1?

• A)$1,620
• B)$360
• C)$540
• D)$2,160
• E)$1,080

---

Definitions:

Decision-making Process

The steps taken by individuals or groups to choose among alternatives and solve problems.

Time

The indefinite continued progress of existence and events in the past, present, and future regarded as a whole.

Affective Component

The emotional or feeling segment of an attitude, which influences individuals' feelings or emotions about an object, person, or event.

Behavioral Component

Pertains to the aspects of psychology that involve observable human actions and responses in various situations.