Consider a pure exchange economy with twomysteriousgoods (good 1andgood 2) and twoeven more mysteriousconsumers (Consumer AandConsumer B).

Consider a pure exchange economy with two mysterious goods (good I and good 2) and two even more mysterious consumers (Consumer A and Consumer B). Consumer A owns 8 units of good 1 and 1 unit of good 2, and her preferences are represented by the following utility function: uA(:c1, x2) = 2101-2102, where 31 represents the consumer's consumption of good I and .732 represents the consumer's consumption of good 2. Consumer B owns 2 units of good 1 and 4 units of good 2, and her preferences are represented by the following utility function: u3(a:1,a:2) = 3:1 + 2102, where 331 represents the consumer's consumption of good 1 and 2102 represents the consumer's consumption of good 2. (5 marks) Represent this pure exchange economy with the help of an Edgeworth box and mark the loc- ation of all the Pareto-efcient allocations. You must support your graphical solution with an analyt- icalfmathematical argument. (5 marks) Assume that the two consumers are allowed and able to negotiate with each other at no cost. Mark the location of all those allocations in the Edgeworth box that could constitute the nal outcome of the negotiation between the two consumers. (Hint: Negotiation is assumed to be voluntary, therefore agreements should be mutually benecial to the negotiating parties.) (10 marks) Find and mark in the Edgeworth box the allocations that are envy free. You must support your graphical solution with an analytical! mathematical argument. (10 marks) Assume that the two consumers are allowed and able to trade with each other, that both consumers act as price-takers, and that good I is the numeraire. Find the competitive equilibrium of this pure exchange economy