Recall Lucy and Melvin from Problem 6

question 10

Multiple Choice

Recall Lucy and Melvin from Problem 6. Lucy's utility function is 2X_L + G and Melvin's utility function is X_MG, where G is their expenditures on the public goods they share in their apartment and where X_L and X_M are their respective private consumption expenditures. The total amount they have to spend on private goods and public goods is $21,000. They agree on a Pareto optimal pattern of expenditures in which the amount that is spent on Lucy's private consumption is $6,000. How much do they spend on public goods?

• A) $5,550
• B) $10,000
• C) $2,500
• D) $5,000
• E) There is not enough information here to be able to determine the answer.

---

Definitions:

Common Categories

Common categories refer to general classifications or groups into which items, ideas, or concepts are organized based on shared characteristics or attributes.

Marketing Messages

Promotional messages that usher potential buyers through the purchasing process without asking them to make an immediate decision.

Sales Messages

Promotional messages that encourage potential buyers to make a purchase decision then and there.

Selling Points

The most attractive features of a product or service.