Suppose there is an economy with two consumers, Chelsea and Jingwel, who have utility functions defined over two goods given by u"(ring ) - log of + 0logos and w(3/,2:) = respec- tively. Chelsea has an endowment of 4 units of good 1 while Jingwei has an endowment of 4 units of good 2. Assume that # - 1 unless specified otherwise. (a) What are the agents' demands for each good? Find the general equilibrium prices. [8 marks] (b ) Imagine now that @ - 2. Explain intuitively or through calculations how this will change the demands for good 2 and the general equilibrium prices. Will Jingwel be better or worse off? [7 marks] (c) If / does indeed increase, is there a case for the government to intervene and transfer endow- ments from Jingwei to Chelsea? Refer to a course reading in your answer. [10 marks]