QUESTION 1 Alice (A) and Bob (B) have an endowment of goods 1 and 2, with Alice's endowment being (wf, wg) = (1,2) and Bob's endowment equals (wf, w) = (1,3). Alice's utility is given by ua(zf, x4) =...

Extracted text: QUESTION 1 Alice (A) and Bob (B) have an endowment of goods 1 and 2, with Alice's endowment being (wf, wg) = (1,2) and Bob's endowment equals (wf, w) = (1,3). Alice's utility is given by ua(zf, x4) = 2 ln z4 + In z4, while Bob's utility is up(zf, x}) = In z? + 2 ln z}. Find the competitive (Walrasian) equilibrium prices in this pure exchange economy. Select one: O a. P1 = 5, P2 = 3 %3D O b. P1 = 3, P2 = 7 %3D O c. P1 = 7, P2 = 3 O d. Pi = 1, P = 4 Consider the same set up as in Question 1. Which of the following consumption bundles of consumer A belong to the contract curve? Select one: O a. rf = 1, xg = 1 O b. af = 2, xg = 1 O c. af = 1, x O d. af = 2, xg = 4 %3D %3D 3