Suppose that Betty is facing two options a and b. a gives Betty $4 on Tuesday, while b gives Betty $5 on Wednesday. Betty's utility function over money is given by u(x) = x2. Suppose that Betty is an exponential discounter and she prefers option a to option b on Monday. What is the range for Betty's discount factor? Draw Betty's "time indifference curve" that go through option a and her "time indifference curve" that go through option b on the same graph

Suppose that Betty is facing two options a and b. a gives Betty $4 on Tuesday, while b gives Betty $5 on Wednesday. Betty's utility function over money is given by u(x) = x2. Suppose that Betty is an exponential discounter and she prefers option a to option b on Monday. What is the range for Betty's discount factor? Draw Betty's "time indifference curve" that go through option a and her "time indifference curve" that go through option b on the same graph

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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