consumption of Pepsi in 2013. You… Show more Suppose X12 i

consumption of Pepsi in 2013. You… Show more Suppose X12 is your consumption of Pepsi in 2012, and X13 is your consumption of Pepsi in 2013. You have $ 200 to spend on Pepsi in 2012, and $ 220 in 2013, and the interest rate is fixed at r=10%, also the utility function if given by: U(X) = X12*X13, 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 will happen if the interest rate r increases? • Show less

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