Recall Bonnie and Clyde from Problem 5

question 1

Multiple Choice

Recall Bonnie and Clyde from Problem 5. Suppose that their total profits are 192H, where H is the number of hours they work per year. Their utility functions are, respectively, U_B(C_B, H) = C_B - 0.02H² and U_C(C_C, H) = C_C - 0.04H², where C_B and C_C are their private goods consumptions and H is the number of hours they work per year. If they find a Pareto optimal choice of hours of work and income distribution, the number of hours they work per year is

• A) 750.
• B) 2,400.
• C) 1,700.
• D) 1,600.
• E) 850.

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Definitions:

Governing Power

The authority or jurisdiction to govern, regulate, or control a specific area or domain.

Tax Limitations

Restrictions or caps placed on the amount of taxes that can be imposed by governmental entities.

First Amendment

A part of the United States Constitution that protects freedoms concerning religion, expression, assembly, and the right to petition.

Free Speech

The right to express one's opinions publicly without government restraint or censorship, safeguarded by legal provisions in democratic societies.