On a Certain Island There Are Only Two Goods, Wheat

question 1

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 3 units of milk or 32 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)all citizens consume the same commodity bundle.
• C)every consumer's marginal rate of substitution between milk and wheat is -1.
• D)total milk production is 1,500 units.
• E)None of the above is true at every Pareto optimal allocation.

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Definitions:

Share the Risk

A strategy where risks are distributed among different parties, such as through partnerships or insurance, to reduce the impact on any single entity.

Conservation

The protection, preservation, management, and restoration of natural environments and wildlife.

Resources

Refers to a broad range of assets, including financial, human, technological, and natural resources, available for use in the production of goods or delivery of services.

Need for Affiliation

A person's desire to build and maintain interpersonal relationships and be part of a group.