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5. Assume that there are two consumers, A and B, and two goods, 1 and 2. The two consumers' initial endowments are wit = (wa
5. Assume that there are two consumers, A and B, and two goods, 1 and 2. The two consumers' initial endowments are wit = (wa 1 , WA ) = (1, 1) and WB = (wf, w? ) = (1, 1). Moreover, let x4 = (21, x? ) and x = (of,27 ) be the consumption bundles of the two consumers, and denote by me and m their respective incomes. Suppose that their indirect utility functions are given by: v^ (P1, p2, m4 ) = logma - ologp1 - (1 - a) log p2, UE (P1, p2, m ) = logm - Blogp1 - (1 - 3) log p2, where 0
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