Just North of the Town of Muskrat, Ontario, Is the Town

question 2

Multiple Choice

Just north of the town of Muskrat, Ontario, is the town of Brass Monkey, population 4,500.Brass Monkey, like Muskrat, has a single public good, the town skating rink and a single private good, Labatt Ale.Everyone's utility function is U_i(X_i, Y) = X_i - 81/Y, where X_i is the number of bottles of ale consumed by i and Y is the size of the skating rink in square meters.The price of ale is $1 per bottle.The cost of the skating rink to the city is $5 per square meter.Everyone has an income of at least $5,000.What is the Pareto efficient size for the town skating rink?

• A)270 square meters.
• B)390 square meters.
• C)195 square meters.
• D)545 square meters.
• E)None of the above.

---

Definitions:

Inventory

The total amount of goods and materials held by a company to support production, fulfill orders, and maintain service levels.