1. Consider an exchange economy with two people, A and B, and two goods, 1 and 2 . Each person has well-behaved preferences. Person A has an endowment A=(2,3) and person B has an endowment B=(2,2) Say that the economy is at a competitive equilibrium. The price per unit of good 2 is $1, and person A's consumption bundle is xA=(3,1). a) What is the price of good 1 in the equilibrium? How do you know? What is person B's bundle in the equilibrium? How do you know? b) Sketch an Edgeworth box for this economy. Label the axes properly. Show (i) the endowment allocation, (ii) the equilibrium allocation, (iii) the line representing each person's budget line. 1. Consider an exchange economy with two people, A and B, and two goods, 1 and 2 . Each person has well-behaved preferences. Person A has an endowment A=(2,3) and person B has an endowment B=(2,2) Say that the economy is at a competitive equilibrium. The price per unit of good 2 is $1, and person A's consumption bundle is xA=(3,1). a) What is the price of good 1 in the equilibrium? How do you know? What is person B's bundle in the equilibrium? How do you know? b) Sketch an Edgeworth box for this economy. Label the axes properly. Show (i) the endowment allocation, (ii) the equilibrium allocation, (iii) the line representing each person's budget line