2 Two-Period Model Cookie Monster lives for two periods (period T = 0 and 1. In what follows, subscript , denotes period). He earns yr, pays to for tax and consumes c, baskets of numeraire composite goods in each period. He will choose (c;, c)) to maximize his utility level under his (usual) budget constraint. Now suppose that Cookie Monster faces an addi- tional constraint. He can: (a) neither save or borrow. (b) save but not borrow. (c) borrow but not save. 1. * ** 3x3 With co on the horizontal axis and c, on the vertical axis, shade in the set of affordable bundles in each case above. 2. *x* 3x3 In each case in item 1, fill in in- difference curves where the additional constraint will not affect his consumption choice. Namely, present a case where he will choose (c*, c*) whether he faces the additional constraint or not. 3. *x* 8 Consider item (c). Suppose that unlike item 2, (c3, c*) falls outside the area you shaded in item 1. Can the government help him still choose (c, c#) while keeping to their own budget con- straint? If so, how? If not, why not