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

question 4

Multiple Choice

Just north of the town of Muskrat, Ontario, is the town of Brass Monkey, population 700.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 - 121/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 $7 per square meter.Everyone has an income of at least $5,000.What is the Pareto efficient size for the town skating rink?

• A)110 square meters.
• B)115 square meters.
• C)230 square meters.
• D)225 square meters.
• E)None of the above.

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Definitions:

Indirect Costs

Costs that are not directly traceable to a specific product or service but are necessary for the business's overall operation.

Cost Object

An item for which costs are separately measured and assigned, such as a product, service, project, or customer.

Product Costs

All costs incurred to acquire or manufacture a product, including direct materials, direct labor, and manufacturing overhead.

Financial Statements

Reports that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.