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Figure 9.4a: Illustration of Situational Impatience
Figure 9.4a provides a graphical representation that illustrates the concept of situational impatience. It shows that an individual who currently possesses little but expects to have much more later will exhibit a strong preference for consuming now in order to smooth their overall consumption pattern between the present and future. [1]
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CORE Econ
Economics
Social Science
Empirical Science
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Economy
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.9 Lenders and borrowers and differences in wealth - The Economy 2.0 Microeconomics @ CORE Econ
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Figure 9.4a: Illustration of Situational Impatience
A freelance graphic designer is experiencing a temporary lull in projects, leaving them with very low income for the current month. However, they have just signed a contract for a large, lucrative project that will provide a substantial payment in three months. The designer chooses to use a high-interest credit card to purchase a new, non-essential piece of equipment they've wanted. Which of the following economic principles best explains the designer's decision to borrow at a high cost?
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