Emma has a utility function U(x1, x2, x3) = log x1 + 0.8 log x2 + 0.72 log x3 over her incomes x1, x2, x3 in the next three years. This is an example of(A) expected value;(B) quasi-hyperbolic utility function;(C) standard discounted utility;(D) none of the above. Emma’s preferences can exhibit which of the following behavioral patterns?(A) preference for flflexibility;(B) context effffects;(C) time inconsistency;(D) intransitivity.

People typically intend to forfeit small, immediate gains for larger rewards in the future, but they…

Answered: Emma has a utility function U(x1, x2,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Emma has a utility function U(x1, x2, x3) = log x1 + 0.8 log x2 + 0.72 log x3 over her incomes x1, x2, x3 in the next three years. This is an example of

(A) expected value;

(B) quasi-hyperbolic utility function;

(D) none of the above.

Emma’s preferences can exhibit which of the following behavioral patterns?

(A) preference for flflexibility;

(B) context effffects;

(D) intransitivity.

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