Explain the meaning that an individual has a positive rate of time preference.

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Answer 1

Question

Chapter 16, Problem 1QP

To determine

Explain the meaning that an individual has a positive rate of time preference.

Expert Solution & Answer

Explanation of Solution

Generally, majority of the people greatly prefers the present consumption to the future consumption. This means that the degree of time preference is high for some individuals. For example, majority of the consumers prefer to buy a car today than to purchase a car after 5 years. Therefore, the positive rate of time preference indicates the preference for earlier availability of goods and services over the later availability of goods and services.

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Answer in step by step with explanation. Don't use Ai.

Use the figure below to answer the following question. Let I represent Income when healthy, let I represent income when ill. Let E [I] represent expected income for a given probability (p) of falling ill. Utility у в ULI income Is есте IM The actuarially fair & partial contract is represented by Point X × OB A Y

Suppose that there is a 25% chance Riju is injured and earns $180,000, and a 75% chance she stays healthy and will earn $900,000. Suppose further that her utility function is the following: U = (Income) ³. Riju's utility if she earns $180,000 is _ and her utility if she earns $900,000 is. X 56.46; 169.38 56.46; 96.55 96.55; 56.46 40.00; 200.00 169.38; 56.46

Answer 2

Question

Chapter 16, Problem 1QP

To determine

Explain the meaning that an individual has a positive rate of time preference.

Expert Solution & Answer

Explanation of Solution

Generally, majority of the people greatly prefers the present consumption to the future consumption. This means that the degree of time preference is high for some individuals. For example, majority of the consumers prefer to buy a car today than to purchase a car after 5 years. Therefore, the positive rate of time preference indicates the preference for earlier availability of goods and services over the later availability of goods and services.

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Answer 3

Question

Chapter 16, Problem 1QP

To determine

Explain the meaning that an individual has a positive rate of time preference.

Expert Solution & Answer

Explanation of Solution

Generally, majority of the people greatly prefers the present consumption to the future consumption. This means that the degree of time preference is high for some individuals. For example, majority of the consumers prefer to buy a car today than to purchase a car after 5 years. Therefore, the positive rate of time preference indicates the preference for earlier availability of goods and services over the later availability of goods and services.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 1QP

To determine

Explain the meaning that an individual has a positive rate of time preference.

Expert Solution & Answer

Explanation of Solution

Generally, majority of the people greatly prefers the present consumption to the future consumption. This means that the degree of time preference is high for some individuals. For example, majority of the consumers prefer to buy a car today than to purchase a car after 5 years. Therefore, the positive rate of time preference indicates the preference for earlier availability of goods and services over the later availability of goods and services.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1QP

To determine

Explain the meaning that an individual has a positive rate of time preference.

Expert Solution & Answer

Explanation of Solution

Generally, majority of the people greatly prefers the present consumption to the future consumption. This means that the degree of time preference is high for some individuals. For example, majority of the consumers prefer to buy a car today than to purchase a car after 5 years. Therefore, the positive rate of time preference indicates the preference for earlier availability of goods and services over the later availability of goods and services.

Answer 6

Chapter 16, Problem 1QP

To determine

Explain the meaning that an individual has a positive rate of time preference.

Expert Solution & Answer

Explanation of Solution

Generally, majority of the people greatly prefers the present consumption to the future consumption. This means that the degree of time preference is high for some individuals. For example, majority of the consumers prefer to buy a car today than to purchase a car after 5 years. Therefore, the positive rate of time preference indicates the preference for earlier availability of goods and services over the later availability of goods and services.

Answer 7

Chapter 16, Problem 1QP

To determine

Explain the meaning that an individual has a positive rate of time preference.

Answer 8

Expert Solution & Answer

Explanation of Solution

Generally, majority of the people greatly prefers the present consumption to the future consumption. This means that the degree of time preference is high for some individuals. For example, majority of the consumers prefer to buy a car today than to purchase a car after 5 years. Therefore, the positive rate of time preference indicates the preference for earlier availability of goods and services over the later availability of goods and services.