In Problem 3, Professor Nightsoil's Utility Function Is U_N(B_N, P_N)

question 13

Multiple Choice

In Problem 3, Professor Nightsoil's utility function is U_N(B_N, P_N) and Dean Interface's utility function is U_I(B_I, P_I) . If Nightsoil's initial endowment is 7 bromides and 5 platitudes and if Interface's initial endowment is 8 bromides and 10 platitudes, then at any Pareto efficient allocation where both persons consume positive amounts of both goods,

• A) Interface consumes 1 bromide.
• B) Interface consumes 3 platitudes.
• C) Nightsoil consumes the same ratio of bromides to platitudes as Interface.
• D) Interface consumes 7.50 bromides.
• E) Interface consumes 2 platitudes.

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Definitions:

Reverse Order

A sequence of objects or tasks arranged in the opposite manner from which they were initially presented or executed.

Cost Flow Assumption

An accounting method that determines the value of remaining inventory and the cost of goods sold, such as FIFO or LIFO.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning weights to some numbers more than others.