General Equilibrium 1 Consider,

U1(x1, y1) = 2(x1y1)^ 4 + 20

U2(x2, y2) = 10lnx2 + 4lny2

W1 = (2, 1) and W2 = (1, 2)

1.1 Characterize the Pareto efficient allocations and contract curve.

1.2 Which allocations are in the core?

1.3 Find the Competitive/Walrasian equilibrium for this problem.

1.4 Is the answer of 1.3 in the core?