Consider a consumer with convex preferences who lives for two periods, today (period 1) and tomorrow (period
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Consider a consumer with convex preferences who lives for two periods, today (period 1) and tomorrow (period 2). His consumption bundle is denoted (c1;c2), where ci is his consumption in period i. His endowment is (w1;w2)=(4;2). The interest rate at which he can borrow and lend is 20%.
-Assuming the consumer is a lender at this interest rate, draw a diagram showing his endowment, his budget constraint (what's the slope?), and his chosen bundle, (c1;c2). (Note, because we don't know what his utility function is, we can't say exactly what c1 and c2 are numerically).
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