Suppose That Paul and David Have Utility Functions U

question 19

Multiple Choice

Suppose that Paul and David have utility functions U = 5A_P + O_P and U = A_D + 3O_D, respectively, where A_P and O_P are Paul's consumptions of apples and oranges and A_D and O_D are David's consumptions of apples and oranges.The total supply of apples and oranges to be divided between them is 12 apples and 20 oranges.The "fair" allocations consist of all allocations satisfying

• A)A_D= A_P and O_D = O_P.
• B)A_D + O_D is at least 16 and A_S + O_S is at least 16.
• C)10A_P + 2O_P is at least 80 and 2A_D + 6O_D is at least 72.
• D)5A_P+ O_P is at least 80 and 2A_D + 3O_D is at least 72.
• E)5A_P + O_P is at least A_D + 3O_D and A_D + 3O_D is at least 5A_P + O_P.

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Definitions:

Deed

A deed is a legal document that represents the ownership and transfers the title of property from one party to another.

Proceeds

The amount of money received from a transaction or event, such as the sale of an asset or completion of a project.

Title Examination

The process of reviewing and verifying the legal ownership and conditions of a property before its sale.

Final Contract

The conclusive agreement between parties, binding them to its terms and signaling the end of negotiations.