Recall Lucy and Melvin from Problem 6

question 11

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 $33,000. They agree on a Pareto optimal pattern of expenditures in which the amount that is spent on Lucy's private consumption is $9,000. How much do they spend on public goods?

• A) $8,550
• B) $4,000
• C) $8,000
• D) $16,000
• E) There is not enough information here to be able to determine the answer.

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Definitions:

Continue Reading

A prompt or link provided in texts or web pages encouraging the reader to proceed with the content beyond an introductory or summary portion.

Bad News

Information or notifications that have negative implications or outcomes.

Shock Reduction

Measures or techniques applied to lessen the intensity or impact of shocks or stressors, typically in physical, psychological, or mechanical contexts.

Overtime Pay

Additional compensation paid to employees for hours worked beyond their standard scheduled work hours, as regulated by law or company policy.