Inter-temporal utility (as defi ned in equation 4.1) is about measuring streams of utility over time. To make life easier for themselves, however, economists normally think about streams of money over time. This should be ok if we think in terms of, say, ‘$10’s worth of utility’, but could be problematic if we really mean ‘a $10 note’. To illustrate, if someone says they are indifferent between $150 in one year’s time to $100 today, what is the discount factor, when the utility function is u ( x ) = x and u ( x ) = √ x and x is money? Think about the implications of this.