(See Problem 2

question 22

Multiple Choice

(See Problem 2.) Robinson Crusoe has exactly 14 hours per day to spend gathering coconuts or catching fish. He can catch 5 fish per hour or he can pick 20 coconuts per hour. His utility function is U(F, C) = FC, where F is his consumption of fish and C is his consumption of coconuts. If he allocates his time in the best possible way between catching fish and picking coconuts, his consumption will be the same as it would be if he could buy fish and coconuts in a competitive market where the price of coconuts is $1, his income is

• A) $280 and the price of fish is $4.
• B) $70 and the price of fish is $5.
• C) $350 and the price of fish is $5.
• D) $280 and the price of fish is $.20.
• E) $175 and the price of fish is $.20.

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Definitions:

Short Time

A brief duration or period which is typically insufficient for significant changes or developments to occur.

Startup Capital

Funds required to start a new business, covering initial operational expenses prior to generating income.

Growth Capital

Capital invested in a company to accelerate its growth without significantly changing its control structure, usually in the form of equity investment.

Equity Preservation

Strategies or measures taken to maintain or protect the value of an investor's ownership stake in a company.