Question: Kim has the following intertemporal utility function for the consumption of iPad games: Ut = ut + (Sut+1 +8 Ut+2 + 8Ut+3+...) where ,

Kim has the following intertemporal utility function for the consumption of iPad games: Ut = ut + (Sut+1 +8 Ut+2 + 8Ut+3+...) where , 8 [0,1] Suppose Kim has the following options and the associated utility streams from playing an hour of iPad games: Ut=0 Ut=1 Prodigy 2 12 Codespark 4 8 Roblox 10 0 ut-o is the utility gained from playing an hour of games on the day the game is played, i.e. immediate benefit. u=1 is the utility gained from playing an hour of games on the day after the game is played, i.e. delayed benefit. Assume = 1 and 8 = 1, and Kim is allowed to play iPad games for an hour today. Which of the three games above will Kim choose to play? (1 mark)

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