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Suppose That Paul and David from Problem 7 Have Utility

Question 1

Multiple Choice

Suppose that Paul and David from Problem 7 have utility functions U = 5AP + OP and U = AD + 3OD, respectively, where AP and OP are Paul's consumptions of apples and oranges and AD and OD are David's consumptions of apples and oranges. The total supply of apples and oranges to be divided between them is 12 apples and 20 oranges. The "fair" allocations consist of all allocations satisfying


A) AD = AP and OD = OP.
B) AD + OD is at least 16 and AS + OS is at least 16.
C) 10AP + 2OP is at least 80 and 2AD + 6OD is at least 72.
D) 5AP + OP is at least 80 and 2AD + 3OD is at least 72.
E) 5AP + OP is at least AD + 3OD and AD + 3OD is at least 5AP + OP.

Correct Answer:

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