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

question 50

Multiple Choice

Harvey Habit has a utility function U(c₁, c₂) =min{c₁, c₂}.If he had an income of $1,230 in period 1 and $615 in period 2 and if the interest rate were 0.05, how much would Harvey choose to spend on bread in period 1?

• A)$1,860
• B)$465
• C)$1,395
• D)$310
• E)$930

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