Lucy's Utility Function Is 2X_L + G and Melvin's Utility

question 19

Multiple Choice

Lucy's utility function is 2X_L + G and Melvin's utility function is X_MG, where G is their expenditures on the public goods they share in their apartment and where X_L and X_M are their respective private consumption expenditures. The total amount they have to spend on private goods and public goods is $30,000. They agree on a Pareto optimal pattern of expenditures in which the amount that is spent on Lucy's private consumption is $9,000. How much do they spent on public goods?

• A) $7,000
• B) $14,000
• C) $8,050
• D) $3,500
• E) There is not enough information here to be able to determine the answer.

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Definitions:

Clinical Psychologist

A mental health professional specialized in diagnosing, treating, and preventing mental, emotional, and behavioral disorders through therapy.

Informed Consent

A process by which a fully informed person can participate in choices about their healthcare or participation in research after understanding the benefits, risks, and potential outcomes involved.

Median

A statistical measure representing the middle value in a data set where half the numbers are less and half are more.

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution of data, such as the mean, median, or mode.