Ann can fifinish a project either this week or next week. The delayed rewards are 10 in either case. (The project can be done only once or not at all). Next week is busy and the cost of fifinishing the project are lower this week. The immediate costs are 4 this week and 6 next week. Ann has a quasi-hyperbolic utility with δ = 1 and β < 1. Imagine that Ann does not fifinish the project this week. Then she should fifinish it next week (A) if β > 0.6; (B) if β > 0.4; (C) only if β = 1; (D) for any β. Suppose that β = 0.5 and Ann correctly anticipates her choice next week. Then she should fifinish the project (A) this week; (B) next week; (C) never; (D) not enough information. Suppose that β = 0.5, and Ann can commit to fifinish the project next week (e.g. by imposing a heavy cost on herself if the project is not fifinished next week). Then she will (A) do the project this week; (B) commit to do it next week and fifinish it then; (C) do it next week without commitment; (D) commit and then not fifinish it
Equations and Inequations
Equations and inequalities describe the relationship between two mathematical expressions.
Linear Functions
A linear function can just be a constant, or it can be the constant multiplied with the variable like x or y. If the variables are of the form, x2, x1/2 or y2 it is not linear. The exponent over the variables should always be 1.
Ann can fifinish a project either this week or next week. The delayed rewards are 10 in either case. (The project can be done only once or not at all). Next week is busy and the cost of fifinishing the project are lower this week. The immediate costs are 4 this week and 6 next week.
Ann has a quasi-hyperbolic utility with δ = 1 and β < 1. Imagine that Ann
does not fifinish the project this week. Then she should fifinish it next week
(A) if β > 0.6; (B) if β > 0.4; (C) only if β = 1; (D) for any β.
Suppose that β = 0.5 and Ann correctly anticipates her choice next week. Then she should fifinish the project
(A) this week; (B) next week; (C) never; (D) not enough information.
Suppose that β = 0.5, and Ann can commit to fifinish the project next week (e.g. by imposing a heavy cost on herself if the project is not fifinished next week). Then she will
(A) do the project this week;
(B) commit to do it next week and fifinish it then;
(C) do it next week without commitment;
(D) commit and then not fifinish it.
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