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+There are two goods in the world, glasses of wine (w) and pieces of cheese (c), and two
consumers, Jim (A) and Martin (B). Jim has 4 glasses of wine (a.k.a. a bottle) and no
cheese; Martin has a block of cheese big enough for 4 pieces.
a) Draw an Edgeworth box to illustrate feasible allocations in this economy.
b) Mark the endowment point.
Jim and Martin are sophisticated consumers who enjoy a glass of wine and a piece of cheese
only when consumed together; they derive no utility from each alone. This means that for
both Jim and Martin, wine and cheese are perfect complements.
c) Sketch an indi erence curve for each consumer that passes through the endowment point.
d) Which allocations represent Pareto improvements over the endowment point?
e) Is there a general equilibrium at the allocation wA = wB = 2, cA = cB = 5? If so, what
prices support it? If not, why not?
f) Is there a general equilibrium at the allocation wA = 1, wB = 3, cA = 1 cB = 3? If so,
what prices support it? If not, why not?
please help me with part e
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