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Harvey Habit in Problem 9 Has a Utility Function U(c1

Question 18

Multiple Choice

Harvey Habit in Problem 9 has a utility function U(c1, c2) = min{c1, c2}. If he had an income of $430 in period 1 and $860 in period 2 and if the interest rate were 15%, how much would Harvey choose to spend on bread in period 1?


A) $945
B) $210
C) $315
D) $1,260
E) $630

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