Suppose That Paul and David from Problem 7 Have Utility

question 13

Multiple Choice

Suppose that Paul and David from Problem 7 have utility functions U = 5A_P + O_P and U = A_D + 3O_D, respectively, where A_P and O_P are Paul's consumptions of apples and oranges and A_D and O_D are David's consumptions of apples and oranges. The total supply of apples and oranges to be divided between them is 14 apples and 14 oranges. The "fair" allocations consist of all allocations satisfying

• A) 10A_P + 2O_P is at least 84 and 2A_D + 6O_D is at least 56.
• B) 5A_P + O_P is at least 84 and 2A_D + 3O_D is at least 56.
• C) A_D + O_D is at least 14 and A_S + O_S is at least 14.
• D) A_D = A_P and O_D = O_P.
• E) 5A_P + O_P is at least A_D + 3O_D and AD + 3O_D is at least 5A_P + O_P.

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Definitions:

Rate of Return

The profit or deficit experienced from an investment, represented as a percentage of the investment's starting price.

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