Read the Chapter "Homer Economicus or Homer Sapiens?" by Jodi Beggs1. The chapter focuses on the idea of behavioural economics in the TV show The Simp- sons. This question asks you to consider how our simple model of behaviour (i.e. U(qx, qy) subject to Y = Pxqx + Pyqy) compares with both the world of Homer Simp- son and the real world. To answer this question and receive full marks, your response should be approximately two paragraphs (and no more than three). The main question to answer is "How does our simple model fail to capture some important behavioural aspects demonstrated in the television show the simpsons?"

The focus should address the following three ideas/concepts: i) how does the assump- tion the people live one period limit the model, ii) how does our assumption that utility is ordinal limit modeling issues of altruism, and iii) how does our model neglect elements such as keeping up with the Joneses2?

Hint: even though your answer needs to be written in sentences, it might be helpful to think about utility as Ui(A,qi,qj) = W(A,qi)+V(qj) where A is all other goods than q, qi is consumption choice of good q for person i, and qj is: consumption choice of good q in the future, consumption choice of good q by others, or average consumption choice of good q.