A consumer's income in the current period is = 50 and in the future period is = 200. There are no taxes in this economy hence = = 0. The consumer prefers to have perfectly smooth consumption so consumer's optimal consumption rule is given by: = . The real rate of interest in this economy is = 0.1

b) Draw the consumer's indifference curves and show the equilibrium levels of c and c on the graph. Compute the numerical values for equilibrium c and c. (4 marks)