5. Jane spent all her income on hot dogs and caviar. Her demand curve for caviar was inelastic at all prices for caviar. Unfortunately, an accident at a nuclear power plant caused the supply of caviar to fall and the price to rise. What happened to Jane's consumption of hot dogs?
12. Crusoe will live this period and the next period as the lone inhabitant of his island. His only income is a crop of 100 coconuts that he harvests at the beginning of each period.
Although some of it does make sense:
Factors Accounting For Differences In Time Preference
Uncertainty regarding the future is one reason to prefer current to future consumption. In countries at war, for example, people often live as though there were no tomorrow, as indeed for many of them there will not be.
Microeconomics and Behavior, Robert H. Frank
No comments:
Post a Comment
Please leave your name in the dropdown box.