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3. Consider an exchange economy with no time, I = 2, L = 1, and S = 2. Each consumer's i = { A, B}
3. Consider an exchange economy with no time, I = 2, L = 1, and S = 2. Each consumer's i = { A, B} utility function is state independent and differentiable Trilli (Cli) + Willzi (X2i) = Wii\\Cli+ 2iVX2i (a) Compute the set of Pareto optimal allocations and the competitive equilibram when Thi = for each i, and initial endowments are WA = (1, 0) and WB = (0, 1) (b) Compute the set of Pareto optimal allocations and the competitive equilibram when Thi = NIH for each i, and initial endowments are WA = (1, 0) and WB = (0, 1) (c) Compute the set of Pareto optimal allocations and the competitive equilibram when TIA = AIN and T1B = , while initial endowments are WA = (1, 0) and WB = (0, 1) (d) Repeat all of the above when initial endowments are WA = (2, 0 ) and WB = (0, 1)
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