4. Suppose that Paul and David have utility functions U = 2AP + OP and U = AD + 2OD, respectively, where AP and OP are Paul's consumptions of apples and oranges and AD and OD are David's consumptions of apples and oranges. The total supply of apples and oranges to be divided between them is 14 apples and 18 oranges. The "fair" allocations consist of all allocations satisfying the following conditions. Select one: a. AD + OD is at least 16 and AS + OS is at least 16. b. AD = AP and OD = OP. c. 4AP + 2OP is at least 46 and 2AD + 40D is at least 50. d. 2AP + OP is at least AD + 2OD and AD + 2OD is at least 2AP + OP. e. 2AP + OP is at least 46 and 2AD + 2OD is at least 50.
4. Suppose that Paul and David have utility functions U = 2AP + OP and U = AD + 2OD, respectively, where AP and OP are Paul's consumptions of apples and oranges and AD and OD are David's consumptions of apples and oranges. The total supply of apples and oranges to be divided between them is 14 apples and 18 oranges. The "fair" allocations consist of all allocations satisfying the following conditions. Select one: a. AD + OD is at least 16 and AS + OS is at least 16. b. AD = AP and OD = OP. c. 4AP + 2OP is at least 46 and 2AD + 40D is at least 50. d. 2AP + OP is at least AD + 2OD and AD + 2OD is at least 2AP + OP. e. 2AP + OP is at least 46 and 2AD + 2OD is at least 50.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:4. Suppose that Paul and David have utility
functions U = 2AP + OP and U = AD + 2OD,
respectively, where AP and OP are Paul's
consumptions of apples and oranges and
AD and OD are David's consumptions of
apples and oranges. The total supply of
apples and oranges to be divided between
them is 14 apples and 18 oranges. The "fair"
allocations consist of all allocations
satisfying the following conditions.
Select one:
a. AD + OD is at least 16 and AS + OS is at
least 16.
b. AD = AP and OD = OP.
c. 4AP + 2OP is at least 46 and 2AD + 4OD is
at least 50.
d. 2AP + OP is at least AD + 2OD and AD +
2OD is at least 2AP + OP.
e. 2AP + OP is at least 46 and 2AD + 2OD is
at least 50.
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