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Consider an exchange economy consisting of two people, A and B, endowed with two goods, 1...

Consider an exchange economy consisting of two people, A and B, endowed with two goods, 1 and 2. Person A is initially endowed with ωA = (ω1A, ω2A) and person B is initially endowed with ωB = (ω1B, ω2B), where ω1A + ω1B = ω1 and ω2A + ω2B = ω2. Person A’s preferences are given by UA(x1, x2) = ln(x1) + x2 and Person B’s preferences are given by UB(x1, x2)=x1 + ln(x2).You are informed that p2 = 1, that ω1A = 0, and that ω2A > 1. With this extra information you can say that:

A.there will be no trade

B. x2A =ω2A + 1

C.p1 = ω2B + 1

D.x2B= 1/(ω2B +1)

E. x2A =ω1B + 1

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