In the Fisher Two-Period Model, the Consumer Achieves His or Her

question 114

Multiple Choice

In the Fisher two-period model, the consumer achieves his or her optimum combination of current and future consumption by selecting:

• A) any combination on his or her highest indifference curve.
• B) the combination on his or her highest indifference curve that is tangent to his or her budget constraint.
• C) any combination on his or her budget constraint.
• D) the combination on his or her budget constraint in which period-one consumption equals period-one income and period-two consumption equals period-two income.

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Definitions:

Decimal Numbers

Numbers that contain a decimal point, dividing the integer part from the fractional part, used in arithmetic computations.

Float Type

A data type in programming that specifies a variable that can hold a real number with fractional precision.

Decimal Places

Refers to the number of digits to the right of the decimal point in a number. This is important in mathematics and when precision is required in calculations.

Reference Type Variables

Variables that store references to the locations of objects in the memory heap, as opposed to containing the objects themselves.