Multiple Choice
Harvey Habit has a utility function U(c1, c2) =min{c1, c2}, where c1 and c2 are his consumption in periods 1 and 2 respectively.Harvey earns $189 in period 1 and he will earn $63 in period 2.Harvey can borrow or lend at an interest rate of 10%.There is no inflation.
A) Harvey will save $60.
B) Harvey will borrow $60.
C) Harvey will neither borrow nor lend.
D) Harvey will save $124.
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
Q6: Will Wisp will live for exactly two
Q7: If the real rate of interest is
Q8: Ophelia says, "If I could lend money
Q9: If apples today are perfect substitutes for
Q10: Mr.O.B.Kandle has a utility function c<sub>1</sub>c<sub>2</sub>, where
Q12: Harvey Habit has a utility function U(c1,
Q13: Ymir Larson farms near Niffleheim, Minnesota.He works
Q14: If a consumer views a unit of
Q15: Kenny Kink's utility function is u(c<sub>1</sub>, c<sub>2</sub>)=min{c<sub>1</sub>,
Q16: For every two boxes of strawberries that