When you allocate consumption optimally between the two periods the marginal rate of time preference between the two periods is:
A)-1.02
B)-1.00
C)-1.80
D)0.80

Question

Quizplus · Accepted Answer

The marginal rate of time preference is the rate at which an individual is willing to trade off consumption in one period for consumption in another period. In this case, the individual is willing to give up 1 unit of consumption in period 1 for 1.02 units of consumption in period 2. This means that the marginal rate of time preference is -1.02.

When You Allocate Consumption Optimally Between the Two Periods the Marginal