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

question 22

Multiple Choice

Suppose that in Problem 8, Mutt's utility function is U(m, j) = max{ 2m, j} and Jeff's utility function is U(m, j) = 3m + j. Mutt is initially endowed with 6 units of milk and 2 units of juice, and Jeff is initially endowed with 2 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) right edge of the Edgeworth box but no other edges.
• B) bottom edge of the Edgeworth box but no other edges.
• C) left edge of the Edgeworth box but no other edges.
• D) left edge and bottom edge of the Edgeworth box.
• E) right edge and top edge of the Edgeworth box.

---

Definitions:

Dissonance Theory

A psychological theory suggesting that inconsistency among beliefs, attitudes, and behaviors causes discomfort, leading individuals to seek coherence.

Floodplain

A flat area of land adjacent to a river or stream that experiences occasional or periodic flooding.

Real Danger

Real danger denotes a genuine threat to an individual's safety or well-being, necessitating an appropriate response.

Unlikely

Having a low probability of occurring; not likely to happen.