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1. Assume that Ammar choose according to the utility function: UA(Xo, XPH, XPN) = XO + 3XPH + 2XPN And Bob choose according to the
1. Assume that Ammar choose according to the utility function: UA(Xo, XPH, XPN) = XO + 3\\XPH + 2\\XPN And Bob choose according to the utility function UA(Xo, XPH, XPN) = XO + 4\\XPH + VXPN Where Xo represents consumption "today", XPH represents consumption "tomorrow" if PH wins the election and XPN represents consumption "tomorrow" if PN wins. Each person is endowed with RM12K units of the good today. If PH wins, Bob will be endowed with RM10K but if PN wins, Bob will be endowed with RM30K. If PH wins, Ammar will be endowed with RM15K and if PN wins, Ammar will also be endowed with RM15K.Storage of the consumption good from today until tomorrow is not possible. a) Determine the set of interior Pareto allocations and Arrow-Debreu prices and allocation
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