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

question 21

Multiple Choice

Harvey Habit has a utility function U(c₁, c₂) = min{c₁, c₂}.If he had an income of $1,290 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)$1,635
• B)$363.33
• C)$545
• D)$2,180
• E)$1,090

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Definitions:

Hyaline Cartilage

A type of tough, elastic cartilage that provides cushioning and support for body structures such as the ribs, nose, and trachea.

Fibrous Joint Capsule

A tough, connective tissue envelope that surrounds a synovial joint, providing support and protection.

Forearm Bone

Refers to one of the two long bones located between the elbow and the wrist, namely the radius and ulna.

Thumb

The first digit of the human hand, positioned oppositely from the other four fingers, enabling grasping and manipulation of objects.