1. A. Amy has $105 and is looking to buy some cheap t-shirts. (All of hers are worn out and she currently has none.) She has Cobb-Douglas preferences for t-shirts compared to everything else such that mrs=x2x1. Find an expression for Amy's demand for t-shirts as a function of the price per t-shirt, p.

B.

Bill sells t-shirts. He has 10 in stock and is currently cashless. His preference as given by u[x1,x2]=10lnx1+x2, which implies that his mrs=10x1.

Find an expression for Bill's willingness to supply shirts at a given price, p. (Be sure it is an expression for how many shirts Bill sells at price p and not an expression for how many he keeps.)

C. Suppose Amy and Bill meet to exchange. Use Amy's demand for shirts and Bill's willingness to supply them to solve for the price at which they will exchange. Enter the exact price as you answer without symbols (other than a decimal, if necessary) or units.

D. How many shirts does Amy buy from Bill?

E. Sketch the Edgeworth Box that represents the exchange between Amy and Bill. Scan your sketch and upload it here.