Suppose That Paul and David from Problem 7 Have Utility

question 7

Multiple Choice

Suppose that Paul and David from Problem 7 have utility functions U = 3A_P + O_P and U = A_D + 2O_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 10 apples and 20 oranges. The "fair" allocations consist of all allocations satisfying

• A) A_D = A_P and O_D = O_P.
• B) 6A_P + 2O_P is at least 50 and 2A_D + 4O_D is at least 50.
• C) 3A_P + O_P is at least 50 and 2A_D + 2O_D is at least 50.
• D) A_D + O_D is at least 15 and A_S + O_S is at least 15.
• E) 3A_P + O_P is at least A_D + 2O_D and A_D + 2O_D is at least 3A_P + O_P.

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Definitions:

Standard Costs

Predetermined or estimated costs to manufacture a product or provide a service, used in budgeting and measuring performance.

Budgeted Cost Systems

Accounting methods that use budgets to project costs and revenues, helping companies plan for future operations and financial performance.

Product Costs

The three components of manufacturing cost: direct materials, direct labor, and factory overhead costs.

Standard Cost

A detailed estimate of what a product should cost.