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Harvey Habit in Problem 9 Has a Utility Function U(c1

Question 19

Multiple Choice

Harvey Habit in Problem 9 has a utility function U(c1, c2) = min{c1, c2}. If he had an income of $420 in period 1 and $1,050 in period 2 and if the interest rate were 10%, how much would Harvey choose to spend on bread in period 1?


A) $240
B) $360
C) $1,440
D) $1,080
E) $720

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