explain the last equation: Consider a two-period life-cycle model of individual behavior where consumption in the two periods is denoted as C1 and C2; in this model each of the two periods consists of many years. Individual wage earnings in the two periods are W1=$4,000 and W2=$2,000. The interest rate is assumed to equal the discount rate and to be one; it is relatively large to reflect the fact that the periods are relatively long rather than a single year. The tax rate is assumed to be 3 constant over the individual's lifetime and equal to 30 percent. (The implications of this assumption are discussed below.) In this example, period two values are discounted to period one present-value equivalents. Suppose first that consumption equals spending in both periods. In this case, the present value in period one of tax paid under the income tax, or PVT(IT), would simply be $1,500, since PVT(IT) = 0.3(4,000) 0.3 (2,000)/2 =1,500. Note that under these circumstances the PVT under the income tax is equal to the product of the tax rate (t) and the present value of the individual's "lifetime endowment" (PVE), which is defined as the present value of earnings over the life