1. Explain the following assumptions of mainstream economics (10 points) i. Context independent preference ii. Stable preference 2. Outline puzzles (only 2 of them) that models based on mainstream economies assumptions have failed to explain (10 points) 3. Consider the following life time utility maximization model Maxx, ET-o Bo'(ESTES, (U(x; ) P(S)) (1 ) s.t x. EX. i. Explain whether the model in (1) is modified to account for non-standard time preference (5 points)li. Identify part of this model that should be modified to account for non-standard belief (5 points) Identify part of this model that should be modified to account for non-standard decision rule (3 point) content. Lehquan & pyklogical 4. Explain the difference between the following concepts (15 points) Bounded self-interest Bounded-willpower 3. Consider the following time preference model that represents the discounted utility function. (2) with f s 1. Discount function: 1, 85,, 862.85].... Time preference consistency suggests conflicting interest between a self t such that the discount factor is i. 86 between t and + + 1 = short-run impatience ii. 5 between t + 1 and t + 2 = long-run patience Consider two individuals; individual / with f = 1 and individual / with 8