Draw a Two Period Budget Line Where the Borrow/lending Rate $Y _ { 1 } + \frac { Y _ { 2 } } { 1 + r }$

question 21

Multiple Choice

Draw a two period budget line where the borrow/lending rate of interest,r,allows consumers to choose consumption in each of the two periods.C1 and C2 given their anticipated income on two periods,Y1 and Y2.The vertical (C2) intercept is

• A) \(Y _ { 1 } + \frac { Y _ { 2 } } { 1 + r }\)
• B) \(\frac { Y _ { 1 } } { 1 + r } + Y _ { 2 }\)
• C) \(Y _ { 1 + } Y _ { 2 } ( 1 + r )\)
• D) \(Y _ { 1 } ( 1 + r ) + Y _ { 2 }\)

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Definitions:

ITQs

Stands for Individual Transferable Quotas, a regulatory tool in fisheries management that limits the total allowable catch and allocates quotas to individuals or companies.

Pacific Halibut

A species of flatfish found in the North Pacific Ocean, valued for commercial and recreational fishing.

Quota

A government-imposed trade restriction that limits the number or value of goods that can be imported or exported during a specific time.

ITQs

Individual Transferable Quotas, a regulatory tool in environmental policy that limits the total allowable catch in fishing, with quotas that can be bought, sold, or leased among fishermen.