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2. Julias intertemporal preferences are represented by a utility function with hyperbolic discounting with parameters B-0.6 and -0.9. Julias instantaneous utility is as follows for any amount of money Sm, her instantaneous utility at any date t is u,(m) -Vm. A time period represents a year. (a) Today Julia is given a choice between receiving $100 in 3 years time or $400 in 5 years time. What does she choose? (b) After 3 years Julia is asked to either confirm the choice she made 3 years ago or change her choice (that is, she is asked whether she chooses S100 right away or $400 after two years). What does she choose? (c) Are Julias preferences time consistent?

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at $100 age. Swar,8, then Now : 4.86 94 9,400, agler 5 yearu OD tti thus Tulla usli choose $4o0 abler 5 years Awu hus select B.st opton, get 100 Right auy c)NO puebesences ahenit fine-Consistent, Boo χ today atAs Cownnited to go wrth option 2) aler 3 yease, henophon 1) time is dove Consumer changes the decision -eo ultu st option,

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