Consider a consumer who lives for T periods and has intertemporally separable lifetime utility given by:
Uₜ = ∑ᵗₜ=1 (1/1+p) ᵗ u(Cₜ)
where
u′(.) >0
u′′ (.) <0
a) The utility function exhibits decreasing marginal utility.
b) The utility function exhibits increasing marginal utility.
c) The utility function exhibits constant marginal utility.
d) The utility function exhibits negative marginal utility.