Lucy's Utility Function Is 2X_L + G and Melvin's Utility

question 6

Multiple Choice

Lucy's utility function is 2X_L + G and Melvin's utility function is X_MG, where G is their expenditures on the public goods they share in their apartment and where X_L and X_M are their respective private consumption expenditures.The total amount they have to spend on private goods and public goods is $28,000.They agree on a Pareto optimal pattern of expenditures in which the amount that is spent on Lucy's private consumption is $10,000.How much do they spent on public goods?

• A)$12,000
• B)$3,000
• C)$6,000
• D)$8,050
• E)There is not enough information here to be able to determine the answer.

---

Definitions:

Customer Transaction

An operation between a business and its customer involving the sale or purchase of goods or services.

Invoices

Documents issued by a seller to a buyer that outline the products or services provided, quantities, prices, and terms of payment.

Credit Memos

Documents issued to a customer, indicating a reduction in the amount that the customer owes to the company.

Refund Receipts

Documents that confirm the return of funds to a customer for returned goods or overpayment.