In an Isolated Mountain Village, the Harvest This Year Is

Multiple Choice

In an isolated mountain village, the harvest this year is 6,000 bushels of grain and the harvest next year will be 900 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 40% 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) 5,850 bushels
B) 3,000 bushels
C) 3,900 bushels
D) 6,900 bushels
E) 1,000 bushels