On a Certain Island There Are Only Two Goods, Wheat

question 10

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 8 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)every consumer's marginal rate of substitution between milk and wheat is -1.
• B)the number of units of milk produced equals the number of units of wheat produced.
• C)total milk production is 4,000 units.
• D)all citizens consume the same commodity bundle.
• E)None of the above is true at every Pareto optimal allocation.

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Definitions:

Generalizability

The extent to which findings or conclusions from a specific study can be applied to broader contexts or different populations, settings, or circumstances.

Experimental Method

A research method involving the manipulation of variables to determine cause and effect relationships.

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Boundaries set by moral principles that guide individuals' actions and decisions, particularly in professional contexts.

Psychological Research

The systematic investigation of mental processes and behavior through experiments, observation, and analysis.