Morris Has the Utility Function U(b, W) = 3b

question 5

Multiple Choice

Morris has the utility function U(b, w) = 3b + 3w and Philip has the utility function U(b, w) = bw, where b is the number of books consumed per month and w is bottles of wine consumed per month. If we draw an Edgeworth box with books on the horizontal axis and wine on the vertical axis and if we measure Morris's consumptions from the lower left corner of the box, then the contract curve contains

• A) a straight line running from the upper right corner of the box to the lower left.
• B) a curve that gets steeper as you move from left to right.
• C) a straight line with slopepassing through the lower left corner of the box.
• D) a straight line with slopepassing through the upper right corner of the box.
• E) a curve that gets flatter as you move from left to right.

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Definitions:

Eight-Cylinder

Referring to an engine with eight cylinders, typically known for providing a higher level of performance and power.

Automobile Engine

A machine designed to convert various forms of energy into mechanical force and motion to power an automobile.

Probability

An indicator of the probability of an event happening, expressed as a numeric value ranging from 0 to 1, with 0 meaning the event cannot happen and 1 meaning the event is certain to happen.

Poisson Distribution

A probability distribution used to model the number of times an event occurs in a fixed interval of space or time.