ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Samantha Smoothie’s utility function is U(c1, c2) = c1c2, where c1 is her consumption in period 1 and c2 is her consumption in period 2. She earns $200 in period 1 and $220 in period 2. Samantha can borrow and lend at an interest rate of 10% and there is no inflation. The number of dollars that Samantha spends in the second period must be (C)
a. |
more than 200 but less than 220. |
b. |
exactly 220. |
c. |
more than 220. |
d. |
exactly 200. |
e. |
less than 200. |
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