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.

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.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.6P

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