Consider an individual Marco who faces an intertemporal choice. He has $100 worth of grain in period 1 (now) and no income in period 2 (later).

Marco has two choices. In scheme 1, he can store the grain that he does not consume in period 1. This results in a loss of 10% of the grain due to pests and rotting. In scheme 2, he can sell the grain that he does not consume and lend the money at 5%.

a) Draw Marco's feasible set under both schemes.

b) Suppose under scheme 1, Marco consumes $60 in period 1 (now). What is the maximum consumption he can undertake in period 2? You must show the relevant calculations. Draw his indifference curve corresponding to this choice.

c) Suppose under scheme 2, Marco wants to consume $66 in period 2 (later). What is the maximum consumption he can undertake in period 1? You must show the relevant calculations. Draw his indifference curve corresponding to this choice.