Question

Time preference is: a. the purchase of new capital goods. b. a sophisticated IOU that documents who owes how much and when payment must be made. c. income that is not spent on consumption goods. d. the desire to have goods and services sooner rather than later (all other things being equal).

Answer 1

Answer:

D. the desire to have goods and services sooner rather than later (all other things being equal).

Explanation:

The time preference talks about the placing relative value on goods received at an earlier date compared with receiving that particular goods at a later date. It is the assumption that people prefer a given goods or services be delivered sooner rather than later all things being equal. It occurs when a person focus on having a good sooner rather than later.

Answer 2

Answer:

D) the desire to have goods and services sooner rather than later (all other things being equal).

Explanation:

In economics, time preference refers to the value businesses and individuals give to money and other assets in time. The value of money and other assets changes over time, e.g. one dollar today is worth more than one dollar tomorrow. The same applies to other assets, customers assign them a different value depending on when they get them. For example, if you want to purchase a hamburger because you feel hungry, it is not the same to be able to purchase a hamburger right away, than to have to wait four hours before receiving one. Or a girl that wants to purchase a dress for her prom dance will assign a higher value to dresses that are readily available instead of having to wait a couple of months in order t receive them.