# Question

Explain why 1 plus the interest rate in the inter-temporal choice model is analogous to the relative price ratio in the consumer choice model discussed in Chapter 3.

## Answer to relevant Questions

Jennifer, who earns an annual salary of $20,000, wins $25,000 in the lottery. Explain why she most likely will not spend all her winnings during the next year.The only DVD rental club available to you charges $4 per movie per day. If your demand curve for movie rentals is given by P = 20 - 2Q, where P is the rental price ($/day) and Q is the quantity demanded (movies per year), ...Kathy earns $55,000 in the current period and will earn $60,000 in the future period. What is the maximum interest rate that would allow her to spend $105,000 in the current period? What is the minimum interest rate that ...Smith lives in a world with two time periods. His income in each period, which he receives at the beginning of each period, is $210. If the interest rate, ex-pressed as a fraction, is 0.05 per time period, what is the ...What grounds are there for assuming that a randomly chosen social worker is less likely to cheat you in cards than a randomly chosen person?Post your question

0