Question: This exercise refers to the utility streams in Table 8.2. For each of the following people, compute 8. (a) At t = 0, Ahmed is

This exercise refers to the utility streams in Table 8.2. For each of the following people, compute 8.

(a) At t = 0, Ahmed is indifferent between utility streams a and b.

{b) At t = 0, Bella is indifferent between utility streams b and c.

(c) At t = 0, Cathy is indifferent between utility streams a and c.

(d) At t = l, Darrence is indifferent between utility streams b and c.

Table 8.2 Simple time-discounting problem t=0 t=1 t=2 a 1 3 b

Table 8.2 Simple time-discounting problem t=0 t=1 t=2 a 1 3 b C d 3 4

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