Can you please explain number 1? I plan on asking more questions

1.) Two consumers have identical Cobb Douglas utility uA = FA . r, and us = 1 . I3. Endowments are WA = (15, 0) and wg = (25, 0). There is a constant returns technology 92 = 4yl owned by person A. Let the equilibrium price of good 1 be p1 = 1 as always. What is the equilibrium price of good 2, p2? The firm profit maximization problem is: IT = P2 . 4y1 - Ply Taking a derivative and setting equal to zero yields 4p2 - p1 = 0. Since p1 = 1, then P2 = 1 2.) Continue the setting from problem 1.). Plug prices into consumer demand func- tions, then use market clearing to find the optimal amount of production. How much yz is produced in equilibrium? Cobb-Douglas demands are: 15p1 = 7.5, TA =2P1 15p1 IA 2p2 = 30 And for person B: IB = 25p1 = 12.5, 25p1 - 50 2p1 2p2 Market clearing for good 2 yields: I'A + Ig = 30 + 50 = yz Hence production of good 2 is yz = 80. The amount of input required to produce this is 31 = 20. 3.) Continue the setting from problem 1.). Now that we have found equilibrium, is it Pareto efficient? Solve for the contract curve. Start with the condition MRSA = MRS; = MRT: To find the contract curve, simply solve the condition MRSA = MRT: TA = 41A