Consider the following economy. At t=0, Agent A owns an asset X with payoff x at t=2 where x is uniformly distributed between 80 and 200. Agent B owns w=100 at t=0 and wants to consume at t=1. In order to store his wealth, agent B wants to buy a bond from agent A. The bond is backed by asset X. Agent A is willing to sell the bond if the price is equal expected payoff of the bond. The interest rate is r=0%. All agents maximize expected utility. a) What is the face value of the bond that agent B can buy for p=100? [2 Points] At t=1, agent B wants to consume and trades with agent C by selling the whole bond or selling a new security using the bond as collateral. Suppose agent C can learn about x at information cost =2. If agent C does not acquire information, he is willing to buy the bond or any other security for a price equals expected payoff. b) How much can agent B consume at t=1 by trading with agent C such that agent C buys with probability 1? [2 Points] Now suppose there is a change in macroeconomic conditions at t=1. All agents learn that x is now uniformly distributed between 10 and 200. c) How much can agent B consume at t=1 by trading with agent C such that agent C buys with probability 1? [6 Points]