Which of the following people are consumption smoothing and which are not? Explain your reasoning using the opportunity cost and marginal principles.

a. Sharon Tirabassi won $10 million in the Ontario lottery in 2004. By 2015, she had burnt through almost all the winnings, was riding the bus to parttime jobs, and was living in a rental property.

b. Karyn takes out modest student and personal loans to pay for living expenses while she finishes her degree. She plans to get an accounting degree and enter the workforce making about $50,000 a year, and will eventually earn close to six figures.