A. Explain the concepts of income and substitution effects using college student (Phelps) example provided in chapter 9 notes. (5 points) B. Washington post and Forbes newsletter, "American professor wins Nobel Prize in economics for trying to understand bad human behavior". Direct quotation from the Newsletter, "Humans prefer instant gratification right now, even if they know that being patient would yield them more money or a better life down the road". Is this quotation describing consumer rationality? (5 points) Compare and contrast the three fundamental assumptions concerning rationality (in Chapter 9, Assumptions about utility) with the three concepts in the article "Richard Thaler And The 'Human Factor' In Economics". Use 150 -200 words. (10 points) C. We also learnt from chapter 9 that, consumers buy stuff because: 1. They want them e.g. hamburgers. 2. They have to use them e.g. gasoline 3. They ought to use them e.g. cod liver oil 4. Their habit demand so e.g. cigarettes Explain a general term used by economists to refer to satisfaction gained from the consumption state above. (2 Points) D. Below is a direct quotation from the book "Compound Effect" by Darren Hardy. "If you were given a choice between taking $3 million in cash this very instant and a single penny that doubles in value every day for 31 days, which would you choose?"