Now suppose that Alice is joined by Bob, whose utility function is identical to Alice's. We can think of an exchange economy in which Alice and Bob are the agents, money in state 1 and money in state 2 are the goods, and an allocation is a vector (zi!, 24, 2P, 2%), giving the amount of money Alice has in state 1 and in state 2, and the amount of money Bob has in state 1 and state 2. Suppose Alice has an endowment that gives her 4 in state 1 and 0 in state 2. Bob has an endowment that gives him 0 in state 1 and 4 in state 2. Hence, the endowment for Alice is i, w4') = (4,0) and the endowment for Bob is (w, wf) = (0, 4). 1.3 [10 points] Suppose Alice and Bob both simply consume their en- dowments. Is the resulting allocation, given by (x'{l, mj{l, m'lg ,mQB ) = (4,0, 0,4), Pareto efficient? Explain why or why not, as precisely as you can. 1.4 /8 points] Say that an allocation gives full insurance for Alice ifz{ = :.cj,;l and gives full insurance for Bob if mJIB = 1122B . Show that if Alice is fully insured, then so is Bob