B. Suppose we have an Edgeworth economy in which both individuals have the utility function u1x1

, x2 2 5 x1 a

x2 112a2 and where the economy’s endowment of each of the two goods is e.

a. Set up a maximization problem in which the utility of consumer 1 is maximized subject to the economy-wide endowment constraints and subject to keeping individual 2’s utility at u. (By defining individual 2’s consumption of each good as the residual left over from individual 1’s consumption, you can write this problem with just a single constraint.)