Consider an exchange economy with two people, A and B, and two goods, 1 and 2. Each person has well-behaved preferences. Person A has an endowment of wA= (2,3) and person B has an endowment wB= (2,2). Say that the economy is at competitive equilibrium. The price per unit of good 2 is $1, and person A's consumption bundle is xA* = (3,1).

Sketch an Edgeworth box for this economy. Label the axes properly. Show (i) the endowment allocation, (ii) the equilbrium allocation, (iii) the line representing each person's budget line.

1. Consider an exchange et':onorny with two people, A and B, and two goods, 1 and 2. Each person has wellbehaved preferem':es. Person A has an endowment. MA : (2, 3) and person B has an endowment CUB : (2, 2). Say that the economy is at a competitive equilibrium. The price per unit. of good 2 is $1, and person A's consumption bundle is If, 2 (3, l)