Suppose That Romeo in Problem 8 Has the Utility Function

question 3

Multiple Choice

Suppose that Romeo in Problem 8 has the utility function U = S⁸_RS⁴_J and Juliet has the utility function U = S⁴_RS⁸_J, where S_R is Romeo's spaghetti consumption and S_J is Juliet's. They have 120 units of spaghetti to divide between them.

• A) Romeo would want to give Juliet some spaghetti if he had more than 60 units of spaghetti.
• B) Juliet would want to give Romeo some spaghetti if she has more than 78 units.
• C) Romeo and Juliet would never disagree about how to divide the spaghetti.
• D) Romeo would want to give Juliet some spaghetti if he has more than 76 units of spaghetti.
• E) Juliet would want to give Romeo some spaghetti if she has more than 80 units of spaghetti.

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Definitions:

Production Costs

The total expenses incurred in the manufacture of a product or the delivery of a service, including raw materials, labor, and overheads.

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