Given:  Barbara has an income of $2000 this year, and she expects an income of $1100 next year. She can borrow and lend money at an interest rate of 10%. Consumption goods cost $1 per unit this year and there is no inflation.   a. What is the net present value of Barbara’s endowment?   b. On a graph show the combinations of consumption this year and consumption next year that she can afford. Label Barbara’s endowment with the letter E. Write down Barbara’s budget equation. What is the slope of Barbara’s budget line?

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