Question: answer only Numerical Question 1 Let U, = x y, and U, = x,y, be the utility functions for person 1 and person 2 in

answer only

answer only Numerical Question 1 Let U, = x y, and U,

Numerical Question 1 Let U, = x y, and U, = x,y, be the utility functions for person 1 and person 2 in a two-person, two-good exchange economy. Their initial endowments are given as w, = (1,3) and w, = (3, 1). Let p = 1. A. Find the locus of Pareto-optimal allocations for this economy, and plot them within the Edgeworth Box. B. Given p, = 1 and p. = p, solve for the optimal allocations (x,, y )and (x,, y,) in terms of p. C. Using x, + x, = w +w = 1 + 3, solve for p

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