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06-06-2023
Business

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A consumer's consumption-utility function for a two-period horizon (periods 1 and 2) is 1 ,0.5 u(C₁, C₂) = c.5c2.5; the income stream is y₁ = 1000; y₂ = 1200 and the market rate of == 2 interest is 20%. Determine values for c₁ and c₂ that maximize the consumer's utility.

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