Residents of Ricardia consume wine and living space. A resident who occupies H acres of land and consumes W barrels of wine in a year enjoys utility U = 2 W H. The ith resident is endowed with hi acres of land and one barrel of wine per year. Rights to occupy land are traded competitively for wine. Let the right to occupy each acre of land sell for p barrels of wine per year.

(a) Show that the ith resident enjoys utility (1 + phi)/ p