Question 3 Two individuals, a and b, consume goods x and y. Their endowments are ( = (2, 5) and o = (10, 1). Both have identical utility functions Ui(xi, yi) =(Inxi + Inyi )'? where i = a, b. The price py = 1 and for simplicity, we write pr = p. (Hint: Remember that a monotonic transformation of a utility function represents the same preferences, i.e., MRS does not change. Can you see a monotonic transformation in the given utility function that can simplify the calculation?) a. Derive individual i's demand for good x and good y if my is the income of individual i. (2 marks) b. Derive the equation of contract curve. c. Calculate the equilibrium price p* and the quantity ((x*, y"), (x , yb)). d. Check that the equilibrium quantity is Pareto efficient