A no production economy has 2 consumers (A and B) who each consume two different goods (x and y). Pe… Show more A no production economy has 2 consumers (A and B) who each consume two different goods (x and y). Person A is endowed with (120,270) and has a utility function . Person B is endowed with (480,180) and has a utility function . a) Find the Pareto Optimal allocation where person A has 100 units of good y. b) Show that the Pareto Optimal point in (a) is not the competitive equilibrium from the initial allocation. c) Show that A=(350,350/3), B=(250,1000/3), is the competitive equilibrium from the initial allocation. d) Use the information in (a) and (c) to explain why you know the contract curve is not linear. e) Draw an edgeworth box showing the following: The initial endowment, the PO point from (a) and the IC’s through that point, the competitve equilibrium including the IC’s through the CE and the budget constraint. • Show less