Questions

Since, the starting statement carries a subject; R will be the first statement as it talked about sense of inferiority. S follows next logically. P describes the feeling of inferiority and thus continues with the flow. Q will be the concluding statement and thus form a coherent paragraph.

The correct formation would be, ‘The sense of inferiority in others and not an exalting one is a painful feeling without this indirect appeal of our self-love.’

The life-cycle theory of consumption, popularly known as life-cycle hypothesis,' was developed by Ando and Modigliani" in the early 1960s.

The life-cycle hypothesis postulates that individual consumption in any time period depends on

(i) resources available to the individual,

(ii) the rate of return on his capital, and

(iii) the age of the individual.

The resources available to an individual consist of his existing net wealth and the present value of all his current and future labour incomes. According to the life-cycle hypothesis, a rational consumer plans consumption on the basis of all his resources and allocates his income to consumption over time so that he maximizes his total utility over his life time.