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2. Consider an economy with 2 goods and 2 agents. The first agent has the utility function, u (x1, x2) = ln x +2
2. Consider an economy with 2 goods and 2 agents. The first agent has the utility function, u (x1, x2) = ln x +2 ln x2, and the other one has u (y1, Y2) = 2 ln y + ln y2. The aggregate endowments of the 2 goods are given by (50, 100). Suppose there is a social planner who cares about agents equally. (a) [10 points] Set up the planner's problem. (b) [10 points] Calculate the first-best outcome (i.e., the social planner's solution).
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