Suppose that Molly from Problem 2 had an income of $200 in period 1 and an income of $460 in period 2. Suppose that her utility function were c^a₁c¹^-^a₂, where a = 0.40 and the interest rate were 15%. If her income in period 1 doubled and her income in period 2 stayed the same, her consumption in period 1 would A) increase by $80. B) increase by $40. C) double. D) stay constant. E) increase by $200.

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The Answer of Suppose that Molly from Problem 2 had an income of $200 in period 1 and an income of $460 in period 2. Suppose that her utility function were c^a₁c¹^-^a₂, where a = 0.40 and the interest rate were 15%. If her income in period 1 doubled and her income in period 2 stayed the same, her consumption in period 1 would A) increase by $80. B) increase by $40. C) double. D) stay constant. E) increase by $200.

Suppose That Molly from Problem 2 Had an Income of $200