Suppose That Paul and David Have Utility Functions U =

question 27

Multiple Choice

Suppose that Paul and David have utility functions U = 4A 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 18 apples and 18 oranges.The fair allocations consist of all allocations satisfying the following conditions.

• A)A_D = A_P and O_D = O_P.
• B)8A_P + 2O_P is at least 90 and 2A_D + 6O_D is at least 72.
• C)4A_P+O_P is at least 90 and 2A_D + 3O_D is at least 72.
• D)A_D = O_D is at least 18 and A_S + O_S is at least 18.
• E)4A_P + O_P is at least A_D +3O_D and A_D + 3O_D is at least 4A_P + O_P.

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Definitions:

Observation

An individual data point or measurement recorded during a study or experiment.

Linear Regression

A statistical method for modeling the relationship between a dependent variable and one or more independent variables by fitting a linear equation to the data.

Residuals

The differences between observed values and the expected values predicted by a model.

Fitted Values

Estimates or predictions generated by a statistical model that represent the best guesses for the dependent variable based on the model and the input values.