Question

1. Your lifetime utility is a function of: a. your lifetime income. b. today’s consumption only....

1. Your lifetime utility is a function of:

a. your lifetime income.

b. today’s consumption only.

c. the amount of wealth in the utility function.

d. today’s consumption and the present value of future consumption.

e. the present value of future consumption only.

2. The problem the household must solve is:

a. choosing period consumption to satisfy the concurrent budget constraint.

b. choosing consumption to ensure some income is left over for future generations.

c. choosing lifetime consumption that satisfies the intertemporal budget constraint.

d. making sure the household is saving at least 10 percent of its income.

e. satisfying the intertemporal budget constraint by finding a good source of income.

3. If you have maximized your lifetime utility, you get which of the following?

b.

c.

d.

e.

4. Human wealth is given by:

a. the present value of labor income.

b. government transfers.

c. Health.

d. human capital accumulation.

e. Education.

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Answer #1

Q1 Option C that is today's consumption and present pvalue of future consumption

Lifetime utility depends on the Intertemporal consumption choices

Income is used fit present consumption and future consumption which is saving today

If income is not consumed today then it will save for the future consumption and individual will earn interest on it . So the choice between both gives lifetime utility

Q2 option C  

Choice between in tertemporal budget constraint

Q4 option D

Human capital accumulation is the human wealth

Human capital in the society is the human wealth

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