Assume the representative consumer lives in tum periods and his preferences can he described by the utility function Hoe} = Cl\" WET\": where c is the current consumption1 c" is next period consumption? and ,3 = [195. Let's assume that the consumer can borrow or lend at the interest rate r = lIJE'rE. The consumer receives an income 3.- = III! in the current period and y\" = ll in the next period. The government wants to spend G = 3|] in the current period and G' = 35 in the future period. The consumer pays a lump sum tau: 1 in period III and t" in period I]. 1. Write down the consumer's intertemporal budget constraint. [03 points] 2. If the government sets t = 50? what will he the consumer's estimate of the value of I"? [114 points] 3. Is it optimal for the consumer to consume his disposable income in each period? [10 points 4. Solve the consumer's problem by finding the optimal allocations c* and c*. [10 points] 5. Is the consumer a lender or a borrower? [03 points] 6. Assume the consumer has to choose between two different jobs. Job 1 offers him the in- come bundle (11, #,)=(100, 110) while job 2 offers (12, 12)=(110, 100). Which job will you recommend to the consumer? [10 points]