In Problem 4, Ken's Utility Function Is U(Q_K, W_K) =

question 28

Multiple Choice

In Problem 4, Ken's utility function is U(Q_K, W_K) = Q_KW_K and Barbie's utility function is U(Q_B, W_B) = Q_BW_B. If Ken's initial endowment were 3 units of quiche and 7 units of wine and Barbie's endowment were 6 units of quiche and 7 units of wine, then at any Pareto optimal allocation where both persons consume some of each good,

• A) Ken would consume 3 units of quiche for every 7 units of wine.
• B) Ken would consume 9 units of quiche for every 14 units of wine that he consumes.
• C) Barbie would consume twice as much quiche as Ken.
• D) Barbie would consume 6 units of quiche for every 7 units of wine that she consumes.
• E) None of the above.

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Definitions:

Business Enterprise

An organization engaged in commercial, industrial, or professional activities with the aim of generating profit.

Proprietorships

A form of business organization owned by a single individual who is responsible for all its obligations.

Limited Liability

A legal structure that protects individual investors or business owners from being personally responsible for the debts and liabilities of the business beyond their investment.

Partnership Form

A legitimate business structure where two or more partners collaborate in managing the firm and splitting the profits.