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

question 13

Multiple Choice

Harvey Habit has a utility function U(c₁, c₂) = min{c₁, c₂}.If he had an income of $440 in period 1 and $880 in period 2 and if the interest rate were 20%, how much would Harvey choose to spend on bread in period 1?

• A)$1,280
• B)$320
• C)$213.33
• D)$960
• E)$640

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