Consider an economy with two goods t = 1, 2. Whenever an individual consumes x1 units of good 1 and x2 units of good 2, their utility is given by u(x1, x2) = ln x1 + ln x2, where is a parameter taking values 0 < < 1.

Consider an exchange economy with two consumers, A and B, whose utilities are given as above. However, the parameter is lower for consumer A than for consumer B, i.e., we have A B. Consumer A is endowed with 2 units of good 1, but has no endowment of good 2. Consumer B has no endowment of good 1, but has 2 units of good 2. In the remainder of this question, let p denote the price of good 1 and the price of good 2 be normalised to 1.

Plot your results using the Edgeworth box. Make sure to include the 45 line.