Supposeis your consumptio

Supposeis your consumptio

Supposeis your consumption of Pepsi in 2012, andXis your consumption of Pepsi in 2013. You have $ 200 to spend on Pepsi in2012, and $ 220 in 2013, and the interest rate is fixed at r=10%, also theutility function if given by: U(x) = XX, Find each of the following:1. Intertemporal budget constraints?2. Optimal consumption of Pepsi in 2012 and in 2013?3. Draw an indifference curve, budget constraint, and show what willhappen if the interest rate r increases?

%d bloggers like this: