(solution) Consumer 1 obtains no pleasure from good 1, and consumer 2 obtains no pleasure from good 2. At…

(solution) Consumer 1 obtains no pleasure from good 1, and consumer 2 obtains no pleasure from good 2. At…

Consumer 1 obtains no pleasure from good 1, and consumer 2 obtains no pleasure from good 2. At the initial endowment point both consumers have endowments of both goods. a. Draw the preferences of the consumers in an Edge worth box. b. By determining the trades that improve both consumers’ utilities, find the equilibrium of the economy. c. Display the equilibrium budget constraint.