Suppose That in Problem 8, Mutt's Utility Function Is U(m

question 3

Multiple Choice

Suppose that in Problem 8, Mutt's utility function is U(m, j) = max{ 4m, j} and Jeff's utility function is U(m, j) = 2m + j. Mutt is initially endowed with 2 units of milk and 2 units of juice, and Jeff is initially endowed with 6 units of milk and 6 units of juice. If we draw an Edgeworth box with milk on the horizontal axis and juice on the vertical axis and if we measure goods for Mutt by the distance from the lower left corner of the box, then the set of Pareto optimal allocations includes the

• A) left edge of the Edgeworth box but no other edges.
• B) right edge of the Edgeworth box but no other edges.
• C) left edge and bottom edge of the Edgeworth box.
• D) bottom edge of the Edgeworth box but no other edges.
• E) right edge and top edge of the Edgeworth box.

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Definitions:

Unemployment Rate

The unemployment rate represents the proportion of the workforce that is without a job and actively looking for work.

Guns Production

The manufacture of firearms and related materials, often considered in discussions of military spending or gun control policies.

Butter Production

The process of turning cream into butter, typically through churning, forming a solid dairy product used in various cuisines.

Opportunity Cost

The value of the next best alternative foregone as the result of making a decision.