Question: Mandy has an income of $800 in period 1 and will have an income of $500 in period 2. Her utility function is U(c1, c2) = c0.80 c0.20, where c1 is her consumption in period 1 and c2 is her consumption in period 2. The interest rate is .25. She unexpectedly won a prize that made her period 2 income $1,000 (period 1 income remained $800). By how much would her period 1 consumption increase or decrease? Show your work.