An individual has $100 in income today and expects to have no income in the future. Their only option to save for the future is to store cash in a safe place. If this individual decides to increase the amount of cash they save today by $10, what is the direct consequence for their consumption possibilities?

Opportunity Cost of Saving Cash

An individual has an income of $100 today and expects no income in the future. If this person decides to save $40 of their current income by storing it as cash, this action increases their total consumption possibilities across both today and the future.

Limitations of Storing Cash as a Saving Method

Consumption Smoothing with Cash Savings

An individual has an income of $100 today and expects no income in the future. Their only option for saving is to store cash. Match each potential saving decision with the resulting consumption bundle, represented as (Consumption Today, Consumption in the Future).

An individual has an income of $100 today and expects no income in the future. Their only available method for transferring wealth to the future is to store the physical cash. What is the opportunity cost for this individual of consuming one additional dollar today?

An individual has an income of $100 today and no income in the future. If their only method of saving is to store cash, for every dollar of consumption they forgo today, they can increase their future consumption by exactly ______ dollar(s).

An individual has an income of $100 today and expects no income in the future. Their only available method for transferring wealth to the future is to store the physical cash. Which of the following consumption plans, represented as (Consumption Today, Consumption in the Future), is NOT possible for this individual?

Evaluating a Consumption-Saving Decision