A consumer lives for two periods and earns an income of $100 and $120 in the

first and second periods respectively. They can borrow and lend money between periods at an interest rate of 5%. They can spend their income on a consumption good in each period, that cost $1 per unit. Draw this consumer's budget constraint for consumption 1 and x2 in periods 1 and 2 respectively.

Also, If this consumer's utility function is given by

(!,")= ((x1)^1/2 ) + 0.8(x2)^1/2

calculate this consumer's optimal consumption in each period. Is this consumer a saver, or a borrower?