Suppose There Are 10 Apples and 10 Oranges in the Economy

question 74

Multiple Choice

Suppose there are 10 apples and 10 oranges in the economy. Joe is currently consuming 4 apples and 5 oranges, and Jane is consuming 6 apples and 5 oranges. At this allocation, Joe's marginal utility of apples is 3, and his marginal utility of oranges is 5. Jane's marginal utility of apples is 9. The current allocation is necessarily efficient if:

• A) the price of apples is 60% of the orange price.
• B) Jane's marginal utility of oranges is 6 at this point.
• C) Joe's MRS equal the MRT.
• D) Jane's marginal utility of oranges is 15 at this point.

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Definitions:

Forces Of Nature

Natural phenomena such as earthquakes, floods, and hurricanes that occur with significant impact on human activities and the environment.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, allowing for some degree of market power.

Regulated Monopoly

A market structure where a single company is allowed to operate exclusively with governmental oversight and regulations to ensure consumer protection.