(Endowment shocks) Consider a two-period lived household, whose preferences for consumption are described by the lifetime utility func- tion InCi + BinCz where Ci and C2 denote consumption in periods 1 and 2, respectively, and B is the subjective discount factor. (a) Do these preferences give rise to indifference curves that are down- ward sloping and convex? Show your work. (b) Suppose that the household starts period I with financial wealth equal to (1 + To) Bo, where Bo is an inherited stock of bonds and To is the interest rate on assets held between periods 0 and 1. In addition, the household receives endowments of goods in the amounts Q1 and Q2 in periods 1 and 2, respectively. In period 1, the household can borrow or lend at the interest rate r, > 0 via a bond denoted Bi- Find the optimal levels of consumption in periods 1 and 2 as functions of the household's lifetime wealth, Y- (1 + To) Bo + Qi + Q2/(1 + ri) and the interest rate 71. (c) Find the responses of consumption in period 1, AC1, the trade balance in period 1, ATB1, and the current account in period 1, ACAI, to a temporary increase in the endowment, AQ1 > 0 and AQ2 -0. Provide intuition. (d) Find the responses of consumption in period 1, AC1, the trade balance in period 1, ATB1, and the current account in period 1, ACAI, to a permanent increase in the endowment, AQ1 = AQ2> 0. Provide intuition