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Hira has the utility function U(c1; c2) = c11/2 +2c21/2 where c1 is her consumption in...

Hira has the utility function U(c1; c2) = c11/2 +2c21/2 where c1 is her consumption in period 1 and c2 is her consumption in period 2. She will earn 100 units in period 1 and 100 units in period 2. She can borrow or lend at an interest rate of 10%.

Write an equation that describes Hira’s budget.
What is the MRS for the utility function between c1 and c2?
Now assume that she can save at the interest rate r > 10% and still borrow at the same rate. Draw the new budget constraint. Label all points clearly.
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