On a Certain Island There Are Only Two Goods, Wheat

question 13

Multiple Choice

On a certain island there are only two goods, wheat and milk.The only scarce resource is land.There are 1,000 acres of land.An acre of land will produce either 10 units of milk or 16 units of wheat.Some citizens have lots of land; some have just a little bit.The citizens of the island all have utility functions of the form U(M, W) = MW.At every Pareto optimal allocation,

• A)all citizens consume the same commodity bundle.
• B)total milk production is 5,000 units.
• C)every consumer's marginal rate of substitution between milk and wheat is -1.
• D)the number of units of milk produced equals the number of units of wheat produced.
• E)None of the above is true at every Pareto optimal allocation.

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Definitions:

Benjamin Franklin

A Founding Father of the United States, noted for his discoveries and theories regarding electricity, and numerous civic contributions.

Seven Years' War

Between 1756 and 1763, a major international conflict took place, drawing in the predominant powers of the period and spanning continents such as Europe, North America, Central America, as well as areas like the West African coast, India, and the Philippines.

Colonial Assemblies

Legislative bodies established in the American colonies, which represented the interests of the colonists and had the authority to pass laws pertaining to the colony.