An economy (pure exchange with two individuals with the following utility functions: Adam: U = xy, Sara: U = 2x + y, X being kg of apples, Y being T-shirts. The total quantity of apples and T-shirts in the economy is 100 kg and 100 T-shirts, respectively.
Imagine that the initial allocation of the goods is 25 T-shirts for Adam. Draw this initial allocation using the Edgeworth box. Is this allocation Pareto Efficient?
Find a Pareto Efficient allocation with respect to the initial allocation.