Question: becca is just starting a twoday fullyfunded vacation first thing...
becca is just starting a two-day, fully-funded vacation. First thing this morning, she is given $2000. First thing tomorrow morning, she is given $1000. This is all the money that becca has access to. becca has no access to credit and cannot borrow money. She can, however, save her money overnight in a savings account that pays 15% interest per day. She will spend all of her money while on vacation.
(a) Plot and label becca’s endowment (the bundle she starts off with) in the space of consumption today (C1) and consumption tomorrow (C2). Put C1 on the horizontal axis.