Dear Tutor

Question 2 [10 marks] Sarah and Jane are two representative individuals living in an economy that produces two goods, X and Y. Sarah's and Jane's utility functions are given as: Sarah: US = 100 X05y 25 Jane: UJ = 50 10406 Jane marginal utilities MU, = 50X-0505 MUJ =50 X25y-0.5 Sarah marginal utilities MU = 20X-0610.6 MU, = 30 XRAY-04 The market determined prices of X and Y are $10 and $20, respectively. Current outputs are 58 units of X per time period and 36 units of Y. Jane's current income is $600 per time period, while Sarah's income is $700 per time period. 2.1 Determine the quantities of X and Y that Sarah and Jane should consume in equilibrium. (6)