4 An intertemporal household problem In order to prepare for this question, revisit Question 4.5 from the Calculus exercises dis- tributed at the beginning of the course. The problem is also covered in Section 15.2 of the textbook. Consider a household problem that lives in two periods. In period 1, the household starts with wealth W, and it chooses how to divide it between consumption Cl and saving S. The saving earn an interest rate R, so that at the beginning of period 2, the agents owns (1 + R) S. He then consumes his saving completely in period 2. Denote 0'2 his consumption in period 2