Ken's Utility Function Is U(Q_K, W_K)=Q_KW_K and Barbie's Utility Function

question 26

Multiple Choice

Ken's utility function is U(Q_K, W_K) =Q_KW_K and Barbie's utility function is U(Q_B, W_B) =Q_BW_B.If Ken's initial endowment were 8 units of quiche and 11 units of wine and Barbie's endowment were 16 units of quiche and 11 units of wine, then at any Pareto optimal allocation where both persons consume some of each good,

• A)Barbie would consume twice as much quiche as Ken.
• B)Ken would consume 8 units of quiche for every 11 units of wine.
• C)Ken would consume 24 units of quiche for every 22 units of wine that he consumes.
• D)Barbie would consume 16 units of quiche for every 11 units of wine that she consumes.
• E)None of the above.

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Definitions:

Production Techniques

Production Techniques encompass the methods and processes used in the creation of goods and services, including labor, technology, and machinery.

Maximum Revenues

The highest possible income a company can generate from the sale of its products or services, achieved at the optimal price point and quantity sold.

Coincidence of Wants

A situation in a barter system where two parties each possess an item or service the other desires, facilitating an exchange without the need for a medium of exchange like money.

Exchange and Trade

The act of giving something of value in return for something else, pivotal for the functioning of economies and fostering economic relationships.