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Harvey Habit Has a Utility Function U(c1, C2)= Min{c1, C2}

Question 2

Multiple Choice

Harvey Habit 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

Correct Answer:

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