In Irving Fisher's two-period consumption model, if Y₁ = 15,000, Y₂ = 20,000, the interest rate r is 0.50 (50 percent), and there is a constraint on borrowing that is binding, then C₁ equals: A) 15,000. B) 20,000. C) 28,333. D) 35,000.

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When there is a binding borrowing constraint, the consumer cannot borrow against future income, so C₁ equals Y₁, which is 15,000.

In Irving Fisher's Two-Period Consumption Model, If Y1 = 15,000

In Irving Fisher's Two-Period Consumption Model, If Y₁ = 15,000