Question 1: Sonja and Levi live on Classy Island. There are two things to consume on Classy Island: Oysters (O) and glasses of Champagne (C). Below are two different scenarios that describe Sonja's and Levi's preferences over Oysters and glasses of Champagne. Scenario (A) Sonja's Utility: (Sonja likes Oysters and Champagne equally.) Levi's Utility: Us=0+C UL=0+C (Levi likes Oysters and Champagne equally.) Scenario (B) Sonja's Utility: Levi's Utility: Us=C UL=0+C (Sonja likes only Champagne.) (Levi likes Oysters and Champagne equally.) In each scenario, there are 50 Oysters and 50 glasses of Champagne available to consume. For each scenario, answer the following questions. [40 marks in total] (a) On page 7, locate the utility possibilities set described by Scenario (A) and label it "A", and locate the utility possibilities set described by Scenario (B) and label it "B". If you are writing your solutions on a separate sheet of paper, please recreate the correct graph for each scenario, making sure to label each. You may wish to use the tables at the back of the exam to help you determine the correct set for each scenario, but this is not necessary. Once you've identified the two relevant graphs, you can ignore the remaining four graphs for the duration of this question. [12 marks] (b) Suppose Sonja is endowed with all of the Oysters and Champagne. For both scenarios, locate this endowment point on the respective graph and label it "X". [4 marks] (c) Is this endowment point Pareto Optimal? Circle your answer below. [4 marks] Scenario (A) Yes Scenario (B) Yes No No (d) Identify the set of utility pairs associated with allocations that are Pareto Preferred to allocation X. Label this set "PP" (if this set exists). [4 marks] (e) Identify the Pareto Frontier and label if "PF" (if it exists). [4 marks] (f) Locate the set of utility pairs that may arise after all beneficial trades are complete. Label this set "Final Trades" (if this set exists). [4 marks]