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2. (16 points) Suppose there are two comers, A and B, and two goods, X and Y. The consumers have the following initial endowments and
2. (16 points) Suppose there are two comers, A and B, and two goods, X and Y. The consumers have the following initial endowments and utility functions Consumer A: I X=1 I Y=7 o Ua(X,Y)=WN(KY) Consumer B: X= 7 o Y= 1 . UB = xiidt'ylit Suppose the Price ofX is Px= $1, and the Price on is P\\-= $1. a) (8 points) Suppose each consumer sells their initial endoument and buys back their optimal bundle. Using an Edgeworth Box, illustrate The Budget Constraint The Initial Endowment (W) A's Optimal Bundle (A) B's Optimal Bundle (B) Label the initial endowment W, label A's optimal bundle A, and label B's optimal bundle B. Make sure your graph is clearly and accmately labeled
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