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Dr. M lives for two periods. His utility is given by U(c1,c2)=c1c2, where c1 is consumption in period 1 and c2 is consumption in period
Dr. M lives for two periods. His utility is given byU(c1,c2)=c1c2,wherec1is consumption in period 1 andc2is consumption in period 2. In the first period, he earns $200 and in the second period he earns $920. The interest rate is 15%. The price ofc1andc2is $2. His utility maximizing consumption bundle is:
a) c1= 247.5, c2= 284.6
b) c1= 284.6, c2= 247.5
c) c1= 271.12, c2= 311.79
d) c1= 500, c2= 575
e) c1= 250, c2= 287.5
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