Question

Each of us knows people who spend everything they earn as fast as they get it and also borrow as much as their friends will lend out. Does this tell you anything about the probable magnitude of these persons' rate of time preference? Explain carefully and illustrate your answer with a diagram.

   Each of us knows people who spend everything they earn as fast as they get it and also borrow as much as their friends will lend out. Does this tell you anything about the probable magnitude of these persons' rate of time preference? Explain carefully and illustrate your answer with a diagram.
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Intermediate Microeconomics
Intermediate Microeconomics
Robert W. Clower,… 1st Edition
Chapter 21, Problem 5 ↓

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The rate of time preference refers to the degree to which a person prefers to receive goods or satisfaction sooner rather than later. It reflects how much a person values present consumption over future consumption. A higher rate of time preference indicates a  Show more…

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Each of us knows people who spend everything they earn as fast as they get it and also borrow as much as their friends will lend out. Does this tell you anything about the probable magnitude of these persons' rate of time preference? Explain carefully and illustrate your answer with a diagram.
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