1. Consider a model in which an individual lives only two periods. An individual’s lifetime utility function is ln c0 + 0.9ln c1 , where c0 and c1 are his consumption in first and second period. Suppose he receives an income of $ 15,000 in period 1 and an income of $ 4,400 in period 2. The private interest rate is 10 percent per period, and the person can borrow or lend money at this rate. Assume also that the person intends to consume all of his income over his lifetime (that is, he won't leave any money for his heirs).