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Consider Equations 11 α=1\alpha=1 , Which of the Following Gives a Correct Interpretation of the Following

Question 23

Multiple Choice

Consider equations 11.20 and 11.21. When α=1\alpha=1 , which of the following gives a correct interpretation of the xc,1x_{c, 1} and xc,2x_{c, 2} ?


A) xc,1=xc,2\quad x_{c, 1}=x_{c, 2} because the individual is unable to predict how coffee consumption in t=1\mathrm{t}=1 will affect their preference to drink coffee in t=2\mathrm{t}=2 .
B) xc,1=xc,2x_{c, 1}=x_{c, 2} because the individual is unable to afford additional coffee in t=2\mathrm{t}=2 because he consumed too much coffee in t=1\mathrm{t}=1 .
C) xc,1<xc,2x_{c, 1}<x_{c, 2} because the individual drank coffee in t=1\mathrm{t}=1 he formed an addiction and now must drink more coffee in t=2\mathrm{t}=2 to be satisfied.
D) xc,1>xc,2\quad x_{c, 1}>x_{c, 2} because the individual drank a lot of coffee in t=1\mathrm{t}=1 and thought he would become addicted, but then when he reached t=2\mathrm{t}=2 he realized he was not actually addicted to coffee.

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