Gilberto is a researcher who teaches quantum physics at a university where he earns an annual salary of $160,000. He intends to take the next year off to focus on writing a new undergraduate physics textbook, so he will not earn any income next year. He is currently deciding how much of this year's salary he should save for next year. Assume that there are no tax implications associated with the decision, and ignore what happens afternext year. Therefore, next year Gilberto will consume whatever he saves this year plus interest, and he is not concerned with the future beyond next year.The following graph shows Gilberto's preferences for consumption this year and next year. Suppose initially Gilberto cannot earn interest on the money he saves.

Use the green line (triangle symbol) to plot Gilberto's budget constraint (BC1BC1) on the following graph. Then use the black point (plus symbol) to show his optimum consumption bundle.

Note: Dashed drop lines will automatically extend to both axes.

240 A 220 200 BC, (0% Interest) 180 160 Initial Optimum (0% Interest) 140 120 O CONSUMPTION NEXT YEAR (Thousands of dollars) 100 BC, (50% Interest) 80 60 40 New Optimum (50% Interest) 20 0 20 40 60 80 100 120 140 160 180 200 220 240 CONSUMPTION THIS YEAR (Thousands of dollars)