Microeconmics: logarithmic utility functions and demand in a two persons two goods market!?

Question

Given:
Two Persons two goods with;
1. Utility Functions:
For Person A: U(A) = ln (x1) + ln (x2)
For Person B: U(B) = ln (x1) + ln (x2)

2. Budget restriction:
Good one: (2, 2)
Good two: (2, 0)

Wanted:
- Do you think that the Contract line between the two persons in an Edgeworth-box would be diagonal from the origins?

- How do you think the demand Functions for the two Persons would look like?

- Would the price in equilibrium be 1?

Thanks alot!!

Answer 1

Yes, it would be diagonal.

left sloping downward to the right.

no, the equilibrium would not be 1

Answer 2

ok, you nevertheless convey jointly regardless of employ employ will be due on the unmortgaged houses. for instance in case you you own the yellows and Ventnor and Atlantic are mortgaged you would nevertheless convey jointly $40 8 on Marvin Gardens. So in case you own all 4 railroads and B&O and short Line are mortgaged you would convey jointly no employ on those 2 yet would nevertheless convey jointly $2 hundred on interpreting and Pennsylvania (you nevertheless own all 4). the guidelines absolutely state: "it really is an advantage to carry all the identify Deed playing cards in a shade-crew (e.g., Boardwalk and Park position; or Connecticut, Vermont and Oriental Avenues) because the owner would then cost double employ for unimproved houses in that shade-crew. This rule applies to unmortgaged houses regardless of if yet another resources in that shade-crew is mortgaged." This rule applies to railroads besides.