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Consider an endowment economy with two goods and two individuals. The two individuals A and B have the following endowments. { ( wi , we),

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Consider an endowment economy with two goods and two individuals. The two individuals A and B have the following endowments. { ( wi , we), ( we , we ) ] = [ ( ', 2) , ( 3 , 4 ) The Utility functions for A and B are : UA ( * * * 2 ) = 0. 5log ( x ? ) + log ( * 2 ) UB ( x ; , x 2 ) = lug ( * $ ) + 0. slog ( X2 ) a ) state the market clearing conditions b) Draw the Edgeworth box, including: . the X-y coordinates of the 4 comers. . the x-y coordinates of endowment point . a sketch of some indifference curves for both individuals ( ) Given price P70, find the demand of good 1 for both individuals

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