Step 1: Write the dissolution equilibrium.
$\text{Ag}_2\text{C}_2\text{O}_4(s) \rightleftharpoons 2\text{Ag}^+ + \text{C}_2\text{O}_4^{2-}$.
Step 2: Express ion concentrations from solubility S.
Each formula unit gives 2 silver ions and 1 oxalate ion, so $[\text{Ag}^+] = 2S$ and $[\text{C}_2\text{O}_4^{2-}] = S$.
Step 3: Build the K$_{sp}$ expression.
$K_{sp} = [\text{Ag}^+]^2[\text{C}_2\text{O}_4^{2-}] = (2S)^2(S) = 4S^3$.
Step 4: Insert the value of S.
$S = 2 \times 10^{-4}$ mol L$^{-1}$, so $K_{sp} = 4(2 \times 10^{-4})^3$.
Step 5: Cube and multiply.
$(2 \times 10^{-4})^3 = 8 \times 10^{-12}$, then $4 \times 8 \times 10^{-12} = 32 \times 10^{-12}$.
Step 6: Express in standard form.
$K_{sp} = 3.2 \times 10^{-11}$, which is option (2).
\[ \boxed{K_{sp} = 3.2 \times 10^{-11}} \]