Course: Microeconomics - Intertemporal Choice Suppose Anne has the following intertemporal utility function: U(C₁ , C₂) = Ln C₁ + B Ln C₂ The income stream is Y₁ = 100 and Y₂ = 80. The interest rate is 10%. Consider that in the economy there's a second person, Barbara, who has the same income and the same investment possibilities as Ana and whose utility function is: U(C₁ , C₂) = Ln C₁ + 0.5 Ln C₂ a) Find Barbara's optimal investment. What can be said about the result obtained? b) If the interest rate rises to 15%, find Barbara's new consumption optimum assuming that she has access to the following investment possibilities c) With the above, quantify the income and substitution effects of the increase in the interest rate. Graph it

PD: Only asking for situation for Barbara, initial situation for Anne is omitted in this case