Just North of the Town of Muskrat, Ontario, in Problem

question 9

Multiple Choice

Just north of the town of Muskrat, Ontario, in Problem 1, is the town of Brass Monkey, population 12,800. Brass Monkey, like Muskrat, has a single public good, the town skating rink and a single private good, Labatt Ale. Everyone's utility function is U_i(X_i, Y) = X_i - , where X_i is the number of bottles of ale consumed by i and Y is the size of the skating rink in square meters. The price of ale is $1 per bottle. The cost of the skating rink to the city is $8 per square meter. Everyone has an income of at least $5,000. What is the Pareto efficient size for the town skating rink?

• A) 560 square meters.
• B) 885 square meters.
• C) 280 square meters.
• D) 440 square meters.
• E) None of the above.

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Definitions:

Allowance Method

A technique in accounting used to adjust accounts receivable for the amount estimated to be uncollectible.

Bad Debts

Accounts receivable that are considered uncollectible, representing losses to the company.

Accounts Receivable Turnover

Accounts Receivable Turnover is a financial metric that measures how efficiently a company collects cash from its credit sales, calculated by dividing total credit sales by the average accounts receivable during a period.

Credit Policies

Guidelines established by businesses to determine to whom they will extend credit and on what terms.