On a Certain Island There Are Only Two Goods, Wheat

question 16

Multiple Choice

On a certain island there are only two goods, wheat and milk.The only scarce resource is land.There are 1,000 acres of land.An acre of land will produce either 14 units of milk or 15 units of wheat.Some citizens have lots of land; some have just a little bit.The citizens of the island all have utility functions of the form U(M, W) = MW.At every Pareto optimal allocation,

• A)the number of units of milk produced equals the number of units of wheat produced.
• B)total milk production is 7,000 units.
• C)all citizens consume the same commodity bundle.
• D)every consumer's marginal rate of substitution between milk and wheat is -1.
• E)None of the above is true at every Pareto optimal allocation.

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Definitions:

Postconventional Level

The highest stage in Kohlberg's theory of moral development, where individuals base their moral decisions on universal ethical principles and internal beliefs rather than on societal norms or authority figures.

Moral Judgments

Evaluations or decisions based on the distinction between right and wrong, reflecting personal, social, or cultural values.

Moral Principles

Fundamental beliefs regarding what is right and wrong, which guide behavior and decision-making.

Cognitive Abilities

The mental capacities to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly, and learn from experience.