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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