Q.19 We assume that there are two goods in the world, bread (x) and milk (y), and there are two representative consumers, A and B. A's utility function is UA = XAY) and his endowment is WA = (4, 4). B's utility function is UB = XBYB and his endowment is WB = (0, 0) and we will again let Px = 1 , and we will let Py vary. Suppose that the government sets A's lump-sum tax at TA = -4 and B's lump-sum transfer at TB = 4. Solve for the competitive equilibrium, that is, the market-clearing conditions for A and B. Note: Only one option is correct! Max. score: 2; Neg. score: 0.25 (XA, YA) = (2, 4); (XB, VB) = (2, 1) (XA, YA) = (2, 1); (XB, VB) = (2, 1) (XA, YA) = (2, 3); (XB, VB) = (2, 3) (XA, YA) = (2, 3); (XB, VB) = (2, 1)