Xavier and Yvette Are the Only Two Persons on a Desert

question 1

Multiple Choice

Xavier and Yvette are the only two persons on a desert island. There are only two goods, nuts and berries. Xavier's utility function is U(N_x, B_x) = N_xB_x. Yvette's utility function is U(N_y, B_y) = 2N_y + B_y. Xavier is endowed with 3 units of berries and 8 units of nuts. Yvette is endowed with 6 units of berries and 8 units of nuts. In a competitive equilibrium for this economy, how many units of berries does Xavier consume?

• A) 12.50
• B) 19
• C) 7.50
• D) 9.50
• E) None of the above.

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Definitions:

Latent Insecurity

A hidden or underlying feeling of uncertainty or anxiety about oneself that may not be immediately apparent.

Personal Interaction

Direct communication or engagement between individuals, often leading to the exchange of ideas or building of relationships.

Reciprocal Determinism

The hypothesis suggesting that an individual's actions are a result of, and also impact, their personal characteristics and surroundings.

Unconditioned Reinforcement

A stimulus that naturally and automatically triggers a response without the need for prior learning.