Xavier and Yvette Are the Only Two Persons on a Desert

question 42

Multiple Choice

Xavier and Yvette are the only two persons on a desert island.There are only two goods, nuts and berries.Xavier's utility function is U(N_x, B_x) = N_xB_x.Yvette's utility function is U(N_y, B_y) = 2N_y + B_y.Xavier is endowed with 3 units of berries and 8 units of nuts.Yvette is endowed with 6 units of berries and 8 units of nuts.In a competitive equilibrium for this economy, how many units of berries does Xavier consume?

• A)12.50
• B)19
• C)7.50
• D)9.50
• E)None of the above.

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Definitions:

Hypothesis

A proposed explanation for a phenomenon, subject to further testing and experimentation.

Photosynthesis

The process by which green plants, algae, and some bacteria convert light energy and carbon dioxide into chemical energy in the form of glucose, releasing oxygen as a byproduct.

Producers

Organisms, mainly plants and algae, that can produce their own food through the process of photosynthesis, serving as the base of the food chain.

Reproduction

The process in biology where offspring are generated from their progenitors.