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1. (14 points) Suppose there are two consumers, A and B. The utility functions of each
consumer are given by: UA(X,Y)=X1/2Y1/2UB(X,Y)=4X+Y The initial endowments are:
A:X=4;Y=4B:X=12;Y=4 a) (8 points) Using an Edgeworth Box, graph the initial allocation
(label it "W") and draw the indifference curve for each consumer that runs through the initial
allocation. Be sure to label your graph carefully and accurately.

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1. (14 points) Suppose there are two consumers, A and B. The utility .pdf

  • 1. 1. (14 points) Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X,Y)=X1/2Y1/2UB(X,Y)=4X+Y The initial endowments are: A:X=4;Y=4B:X=12;Y=4 a) (8 points) Using an Edgeworth Box, graph the initial allocation (label it "W") and draw the indifference curve for each consumer that runs through the initial allocation. Be sure to label your graph carefully and accurately.