10 with 115(0) 2 '10, Where: 0 Cl is consumption at time 1 o Cg is consumption at time 2 max 1;. (cl) + n (Cg) Claa'aCQ 3.15. a = '91 71 Cl Cg =y2T2+(1+r)a a 2 b (8.5.1) (a) What does equation (8.5.1) mean? What does b represent? (b) Plot the household's interternporal budget constraint. In the same graph, plot constraint (8.5.1). (c) Solve for cl, C2 and a in closed form. [Hint: notice that the constraint (8.5.1) is a weak inequality, not an equality, so it may or may not be binding. If it is not binding, then you can use the answer from 1. Then think about What happens if it is indeed binding. Then gure out Whether or not it Will be binding]