Xavier and Yvette Are the Only Two Persons on a Desert

question 50

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 5 units of berries and 13 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)13.50
• B)18.50
• C)15.50
• D)31
• E)None of the above.

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Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of goods or services.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.

Prime Costs

The direct costs of a product, which include the costs of direct materials and direct labor involved in its production.

Tires

Rubber-based, circular components designed to cover the wheels of vehicles, providing traction and absorbing shock.