18. Chris maximizes discounted utility U(co, c1, c2) co + ốc1 + 8?c2 for 8 0.8. %3D Which of the following consumption streams will he choose? (Hint: there is no need to compute the utility function for each option. Just look at the tradeoffs between the immediate consumption and the future consumption.) (A) co = c1 = c2 = 10; 5, c1 = 15, c2 5, c1 = 10, c2 = 15; (D) co = 9, c1 = 10, c2 = 12. (B) co 10; (C) co %3D 19. Emma maximizes quasi-hyperbolic discounted utility U(co, C1, c2) = co+Bốc1 + B8?c2 for B = 0.5 and d = 0.8. Which of the following consumption streams will she choose? (A) co = C1 = c2 = 10; (B) co 5, c1 = 15, c2 10; (C) co = 5, c1 = 10, c2 = 15; (D) co = 9, c1 = 10, c2 = 12.

18. Chris maximizes discounted utility U(co, c1, c2) co + ốc1 + 8?c2 for 8 0.8. %3D Which of the following consumption streams will he choose? (Hint: there is no need to compute the utility function for each option. Just look at the tradeoffs between the immediate consumption and the future consumption.) (A) co = c1 = c2 = 10; 5, c1 = 15, c2 5, c1 = 10, c2 = 15; (D) co = 9, c1 = 10, c2 = 12. (B) co 10; (C) co %3D 19. Emma maximizes quasi-hyperbolic discounted utility U(co, C1, c2) = co+Bốc1 + B8?c2 for B = 0.5 and d = 0.8. Which of the following consumption streams will she choose? (A) co = C1 = c2 = 10; (B) co 5, c1 = 15, c2 10; (C) co = 5, c1 = 10, c2 = 15; (D) co = 9, c1 = 10, c2 = 12.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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