Kenny Kink's utility function is u(c₁, c₂)=min{c₁, c₂}, where c₁ is his consumption in period 1 and c₂ is his consumption in period 2.He earns $200 in period 1 and $220 in period 2.Kenny can borrow and lend at an interest rate of 10%, and there is no inflation.The number of dollars that Kenny spends on consumption in the first period must be A)more than 200 but less than 220. B)exactly 200. C)more than 220. D)exactly 180. E)more than 180 but less than 200.

Question

Quizplus · Accepted Answer

The Answer of Kenny Kink's utility function is u(c₁, c₂)=min{c₁, c₂}, where c₁ is his consumption in period 1 and c₂ is his consumption in period 2.He earns $200 in period 1 and $220 in period 2.Kenny can borrow and lend at an interest rate of 10%, and there is no inflation.The number of dollars that Kenny spends on consumption in the first period must be A)more than 200 but less than 220. B)exactly 200. C)more than 220. D)exactly 180. E)more than 180 but less than 200.

Kenny Kink's Utility Function Is U(c1, C2)=min{c1, C2}, Where C1

Kenny Kink's Utility Function Is U(c₁, C₂)=min{c₁, C₂}, Where C₁