Consider Anne who lives for two periods, t and t2. She receives an endowment of 100 each period. She faces a fixed borrowing interest rate of 6% and a fixed lending interest rate of 5%. Her indifference curves are L-shaped, as given in Figure 1. Note that the locus of the vertices of the indifference curves is along the line C2 = 2c1. Please draw the approximate shape of her budget constraint and relevant indifference curve, and find her consumption bundle (C1, C2), where Ci is the Rupee amount consumed in period i. Please label your diagram completely, carefully calculating the intercepts of the constraint. 3 C2 = 2c Ci Figure 1: Consider Anne who lives for two periods, t and t2. She receives an endowment of 100 each period. She faces a fixed borrowing interest rate of 6% and a fixed lending interest rate of 5%. Her indifference curves are L-shaped, as given in Figure 1. Note that the locus of the vertices of the indifference curves is along the line C2 = 2c1. Please draw the approximate shape of her budget constraint and relevant indifference curve, and find her consumption bundle (C1, C2), where Ci is the Rupee amount consumed in period i. Please label your diagram completely, carefully calculating the intercepts of the constraint. 3 C2 = 2c Ci Figure 1