Will Wisp Will Live for Exactly Two Periods

question 6

Multiple Choice

Will Wisp will live for exactly two periods.His utility function is U(c₁, c₂) = c₁c₂, where c₁ is consumption in period 1 and c₂ is consumption in period 2.He will have no income in period 2.His income in period 1 is $80,000.If the interest rate rises from 10 to 12%:

• A)his savings will increase by 2% and his consumption in period 2 will increase.
• B)his savings will not change but his consumption in period 2 will increase by $800.
• C)his consumption in both periods will increase.
• D)his consumption in both periods will decrease.
• E)his consumption in period 1 will decrease by 12% and his consumption in period 2 will increase.

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Definitions:

Touch Point

Any point at which a customer and the company come into contact.

Customer

A person or organization that buys goods or services from a store or business.

Company

An entity formed to engage in a business, trade, or industrial activity, typically characterized by its legal independence and ownership structure.

Customer Relationship Management

A strategy for managing an organization's interactions with current and potential customers, often using data analysis to study large amounts of information.