In an Isolated Mountain Village, the Harvest This Year Is

Multiple Choice

In an isolated mountain village, the harvest this year is 3,000 bushels of grain and the harvest next year will be 1,100 bushels. The villagers all have utility functions U(c₁, c₂) = c₁c₂, where c₁ is consumption this year and c₂ is consumption next year. Rats eat 10% of any grain that is stored for a year. How much grain could the villagers consume next year if they consume 1,000 bushels of grain this year?

A) 2,900 bushels
B) 1,800 bushels
C) 4,100 bushels
D) 4,350 bushels
E) 1,200 bushels