If Fred Were to Consume $1,050 1 Year from Now

question 29

Multiple Choice

If Fred were to consume $1,050 1 year from now, he would consider this as good as spending $1,000 today.He would consider $1,628.89 of consumption 10 years into the future equivalent to $1,000 of consumption today.If the interest rate is 5%, Fred preferences

• A)are consistent with exponential discounting.
• B)are consistent with hyperbolic discounting.
• C)are consistent with geometric discounting.
• D)are inconsistent.
• E)violate the Weak Axiom of Revealed Preference.

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Definitions:

Hypothetical Questions

Inquiries based on imagined or speculative scenarios, often used to explore potential reactions or outcomes.

Initial Client Interview

The first formal meeting between a lawyer and a potential client to discuss the case, gather information, and evaluate the legal situation.

Hostile Witness

A witness who is biased against your client or friendly toward your client’s adversary in a lawsuit or other legal proceeding. An adverse witness.

Adverse Witness

A witness in a legal proceeding whose testimony is expected to be unfavorable or damaging to the party who has called them to testify.