Recall Lucy and Melvin from Problem 6

question 17

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 $24,000. 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) $6,000
• B) $3,000
• C) $6,050
• D) $12,000
• E) There is not enough information here to be able to determine the answer.

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Definitions:

Private-label Brand

Products manufactured by one company for sale under another company's brand, typically offered as lower-cost alternatives to national brands in retail stores.

National Brand

A brand that is marketed and recognized across an entire country, offering a consistent product or service quality and experience.

Huge Retailer

A significantly large and often multinational company that sells goods directly to consumers, encompassing a wide variety of merchandise under one roof or through online platforms.

Adventure Travel

A type of tourism that involves exploration or travel to remote, exotic, and possibly hazardous areas, offering a unique and potentially challenging experience.