QUESTION 8 Think of the same setup: You start your new job in December. You have a contract for only 9 months. You need to decide how you will spend your income during this year. Let's simplify this problem by assuming that winter is t=0, spring is t=1 and summer is t=2. You have 3 options: 1. You can save at 1=0 and t=1 and spend at t=2, which gives you a utility stream of 6-6-36 2. You can save at 1=0 and spend more at t=1 and even more t=2, which gives you a utility stream of 6-10-30 3. You can smooth your consumption at =0, t=1 and t=2, which gives you a utility stream of 12-12-12 Now, you are a hyperbolic discounter at t=0 with 0=1 and B=0.5, calculate the utility of option 3. QUESTION 9 If you are a hyperbolic discounter with 8=1 and =0.5, which option would you prefer at t=0? O option 1 O option 2 O option 3 O none of the above