Question: need step by step explanations thank you 1. Consider an exchange economy with two households (A and B) and a non-storable composite consumption good. Each

need step by step explanations thank you


1. Consider an exchange economy with two households (A and B) and a non-storable composite consumption good. Each agent lives for two periods (t = 0, 1) and there is no uncertainty about their endowment at time 1. The endowment structure is summarized in the following table. household time 0 time 1 A 0 B 2>0 Both households maximize their utility from consumption, which is given by U( ) = logo + Blogg, where i c {A, B}, # = 1/(1+ p) is the discount factor satisfying 0
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