FF C1O% interest rate) F7s interest rate) Mia's endowment - 100 Ma's IC Digher utility) Julia's ic Aulia's IC (through point n Alia's IC (lower utility) 35 56 58 91 Consumption now (S) Consumption later ($)

Introductory Chemistry: A Foundation
9th Edition
ISBN:9781337399425
Author:Steven S. Zumdahl, Donald J. DeCoste
Publisher:Steven S. Zumdahl, Donald J. DeCoste
Chapter10: Energy
Section: Chapter Questions
Problem 30QAP
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Consider the diagram:
FF (10% interest rate)
FF (78% interest rate)
Julia's 100
endowment
38
36
Julia's IC (higher utility)
Julia's IC
Julia's IC (through point F)
Julia's IC (lower utility)
56 58
Consumption now (S)
35
91
Consumption later ($)
Transcribed Image Text:Consider the diagram: FF (10% interest rate) FF (78% interest rate) Julia's 100 endowment 38 36 Julia's IC (higher utility) Julia's IC Julia's IC (through point F) Julia's IC (lower utility) 56 58 Consumption now (S) 35 91 Consumption later ($)
If the interest rate is 10%, at her optimal choice Julia will need to pay the bank $58 in the second period.
Select one:
True
O False
Transcribed Image Text:If the interest rate is 10%, at her optimal choice Julia will need to pay the bank $58 in the second period. Select one: True O False
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