Asked by Matthew Mitrano on May 29, 2024
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Robinson Crusoe has exactly 12 hours per day to spend gathering coconuts or catching fish.He can catch 2 fish per hour or he can pick 4 coconuts per hour.His utility function is U(F, C) FC, where F is his consumption of fish and C is his consumption of coconuts.If he allocates his time in the best possible way between catching fish and picking coconuts, his consumption will be the same as it would be if he could buy fish and coconuts in a competitive market where the price of coconuts is $1, his income is
A) $48 and the price of fish is $2.
B) $48 and the price of fish is $.50.
C) $24 and the price of fish is $2.
D) $72 and the price of fish is $2.
E) $36 and the price of fish is $.50.
Competitive Market
A market structure characterized by a large number of buyers and sellers, free entry and exit, and products that are close substitutes, leading to price determination by supply and demand.
Coconuts
Tropical fruits with a hard outer shell and milky interior, known for their versatility in food products and industrial uses.
Fish
Aquatic animals that are typically cold-blooded, covered with scales, and equipped with fins, used as a significant food source for humans.
- Utilize the principle of maximizing utility to efficiently distribute resources among various options.
Verified Answer
Learning Objectives
- Utilize the principle of maximizing utility to efficiently distribute resources among various options.
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