Peter's Utility Is U(c, D, H) = 8c + 18d

question 11

Multiple Choice

Peter's utility is U(c, d, h) = 8c + 18d - d² - 6h, where d is the number of hours per day that he spends driving around, h is the number of hours per day spent driving around by other people in his home town, and c is the amount of money he has left to spend on other stuff besides gasoline and auto repairs. Gas and auto repairs cost $.50 per hour of driving. All the people in Peter's home town have the same tastes. If each citizen believes that his own driving will not affect the amount of driving done by others, they will all drive D₁ hours per day. If they are all drive the same amount, they would all be best off if each drove D₂ hours per day, where

• A) D₁ = 7 and D₂ = 4.
• B) D₁ = D₂ = 7.
• C) D₁ = 9 and D₂ = 5.
• D) D₁ = 10 and D₂ = 0.
• E) D₁ = 7 and D₂ = 2.

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Definitions:

Locomotion

The ability to move from one place to another, which can include walking, running, swimming, or flying.

Stranger Wariness

Also known as stranger anxiety; an infant’s expression of fear of unfamiliar people.

Self-awareness

The conscious knowledge of one's own character, feelings, motives, and desires.

Receptive Stranger

A term that is not widely recognized or established; could refer to an individual's openness to interacting with unfamiliar people. NO