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SOLVED: Consider a two-consumer, two-period economy. Consumers can buy and sell claims on consumption; in period i = 1,2 at unit price pi. There is 1 unit of the consumption good in period 1, which is entirely owned by consumer A, and b > 0 units of the consumption good in period 2, which are entirely owned by consumer B. The utility of consumer J = A,B from consumption path (x,x) is ln x ln x.(a) Derive the Pareto set of this economy. How do Pareto-efficient allocations depend on b?(b) Derive
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