Consider a world in which there are only two dates: 0 and 1. At date 1 there are three possible states of nature: a good weather state (G), a fair weather state (F), and a bad weather state (B). Denote 31 as the set of these states, i.e., 31 6 S1 = {G,F,B}. The state at date zero is known. Denote probabilities of the three states as 111' = (0.4, 0.3, 0.3). There is one non-storable consumption good, apple. There are three consumers in this economy. Their preferences over apples are exactly the same and are given by the following expected utility function C3\" + 6 2 who. ((351), 81631 where subscript k = 1, 2, 3 denotes each consumer. In period 0, the three consumers have a linear utility and, in period 1, the three consumers have the same instantaneous utility function: c1 '7 \"(6): 1_7, where qr = 0.2 (the coefcient of relative risk aversion}. The consumers' time discount factor, ,6, is 0.98. The consumers differ in their endowments, which are given in the table below: Endowments t = 0 t = 1 8|] G F B Consumer 1 0.4 3.2 1.8 0.9 Consumer 2 1.2 1.6 1.2 0.4 Consumer 3 2.0 1.2 0.6 0.2 Assume that atomic (Arrow-Debreu} securities are traded in this economy. One unit of '6': security' sells at time 0 at a price (19 and pays one unit of consumption at time 1 if state 'G' occurs and nothing otherwise. One unit of 'F security' sells at time 0 at a price :11: and pays one unit of consumption at time 1 if state 'F' occurs and nothing otherwise. One unit of 'B security' sells at time 0 at a price :33 and pays one unit of consumption in state 'B' only