a. A consumer will consumec1 this year andc2 next year. The consumer receives incomes ofm1 this year andm2 next year. Lastly, the consumer may borrow or save at an interest rate,r. Supposem1 equals $100,m2equals $140.00, and the interest rate is5.00%.Supposethe consumer is willing to forgo all second-year consumption. How much can the consumer consume in the first period? $________________

b. Suppose your income is $2,000.00 this year and $1,100.00next year. All you care about is consumption this year and next year. You can borrow or lend at an interest rate of10.00%. The consumption good costs $1.00 per unit this year, and there is no inflation.

b-1. The present value of your endowment is $_____________

b-2. The future value (next year) of your endowment is$_____________