Mary (consumer 1) and Lucy (consumer 2) are the only two consumers in the economy. Each...

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Mary (consumer 1) and Lucy (consumer 2) are the only two consumers in the economy. Each of them consumes only two goods, fish (good x) and chips (good y), which they also own. Consumer 1's utility function is given by U (x, y) = xy She has 25 units of x and 5 units of y. Consumer 2's utility function is given by U2(x, y) Inx+lny. = She has 6 units of x and 20 units of y. Let p be the price of x and normalise the price of y to 1. (a) (4 marks) Draw the Edgeworth Box of this economy, marking clearly the endow- ment point. For each consumer, sketch the indifference curve passing through the endowment point. (b) (2 marks) Calculate the marginal rate of substitution for each consumer at the endowment point. (c) (2 marks) Who is going to sell x and buy y? Why? (d) (5 marks) Find the demand of consumer 1 for x-denote it as x-and the demand of consumer 1 for y-denote it as y. (e) (5 marks) Find the demand of consumer 2 for x-denote it as x-and the demand of consumer 2 for y-denote it as y. (f) (4 marks) Find the equilibrium price of good x. (g) (4 marks) Find the equilibrium consumption bundle of each consumer. (h) (4 marks) Mark your answer to part (g) in the Edgeworth Box you have drawn for part (a). Draw the budget line under the equilibrium price. For each consumer, draw the indifference curve passing through the equilibrium consumption bundle. Mary (consumer 1) and Lucy (consumer 2) are the only two consumers in the economy. Each of them consumes only two goods, fish (good x) and chips (good y), which they also own. Consumer 1's utility function is given by U (x, y) = xy She has 25 units of x and 5 units of y. Consumer 2's utility function is given by U2(x, y) Inx+lny. = She has 6 units of x and 20 units of y. Let p be the price of x and normalise the price of y to 1. (a) (4 marks) Draw the Edgeworth Box of this economy, marking clearly the endow- ment point. For each consumer, sketch the indifference curve passing through the endowment point. (b) (2 marks) Calculate the marginal rate of substitution for each consumer at the endowment point. (c) (2 marks) Who is going to sell x and buy y? Why? (d) (5 marks) Find the demand of consumer 1 for x-denote it as x-and the demand of consumer 1 for y-denote it as y. (e) (5 marks) Find the demand of consumer 2 for x-denote it as x-and the demand of consumer 2 for y-denote it as y. (f) (4 marks) Find the equilibrium price of good x. (g) (4 marks) Find the equilibrium consumption bundle of each consumer. (h) (4 marks) Mark your answer to part (g) in the Edgeworth Box you have drawn for part (a). Draw the budget line under the equilibrium price. For each consumer, draw the indifference curve passing through the equilibrium consumption bundle.