Problem
Read the Chapter "Homer Economicus or Homer Sapiens?" by Jodi Beggs1. The chapter focuses on the idea of behavioural economics in the TV show The Simp- sons. This question asks you to consider how our simple model of behaviour (i.e. U(qx, qy) subject to Y = Pxqx + Pyqy) compares with both the world of Homer Simp- son and the real world. To answer this question and receive full marks, your response should be approximately two paragraphs (and no more than three). The main question to answer is "How does our simple model fail to capture some important behavioral aspects demonstrated in the television show the simpsons?"
The focus should address the following three ideas/concepts: (1) how does the assump- tion the people live one period limit the model, (2) how does our assumption that utility is ordinal limit modeling issues of altruism, and (3) how does our model neglect elements such as keeping up with the Joneses2?