Suppose That Romeo Has the Utility Function U =

question 24

Multiple Choice

Suppose that Romeo has the utility function U = S ⁵_RS ²_J and Juliet has the utility function U = S ²_RS ⁵_J, where S_R is Romeo's spaghetti consumption and S_J is Juliet's.They have 70 units of spaghetti to divide between them.

• A)Romeo and Juliet would never disagree about how to divide the spaghetti.
• B)Romeo would want to give Juliet some spaghetti if he has more than 46 units of spaghetti.
• C)Romeo would want to give Juliet some spaghetti if he had more than 35 units of spaghetti.
• D)Juliet would want to give Romeo some spaghetti if she has more than 48 units.
• E)Juliet would want to give Romeo some spaghetti if she has more than 50 units of spaghetti.

---

Definitions:

Economic Profit

Economic profit is the surplus obtained after subtracting both the explicit and implicit costs from total revenues, emphasizing the opportunity costs of resources used.

Economic Loss

A decrease in monetary value, wealth, or resources, especially as a result of business activities or market factors.

Industry Supply Curve

A graphical representation that shows the relationship between the price of a good and the total output of the industry for that good.

Quantity Supplied

The amount of a good or service that producers are willing to sell at a given price over a certain period of time.