Astrids Utility Function Is U(H A, C A)= H a C

question 56

Multiple Choice

Astrids utility function is U(H A, C A) = H A C A.Birgers utility function is min{H B, C B}.If Astrids initial endowment is no cheese and 5 units of herring and if Birgers initial endowments are 6 units of cheese and no herring, then where p is a competitive equilibrium price of herring and cheese is the numeraire, it must be that demand equals supply in the herring market.This implies that

• A)6/(p + 1)+ 2.50 = 5.
• B)5/6 = p.
• C)6/p + 5/2p= 5.
• D)6/5 = p.
• E)min{5, 6} = p.

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Definitions:

Collective

Pertaining to or shared by a group of individuals, often indicating a collective action or mindset.

Individualistic

Pertaining to the habit or principle of being independent and self-reliant; prioritizing personal goals over group goals.

Power Distance

The extent to which less powerful members of organizations and institutions accept and expect that power is distributed unequally.

Group Development

The process through which a group evolves and progresses in terms of structure, interaction, and achieving collective goals.