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Recall Bonnie and Clyde from Problem 5

Question 3

Multiple Choice

Recall Bonnie and Clyde from Problem 5. Suppose that their total profits are 72H, where H is the number of hours they work per year. Their utility functions are, respectively, UB(CB, H) = CB - 0.03H2 and UC(CC, H) = CC - 0.03H2, where CB and CC are their private goods consumptions and H is the number of hours they work per year. If they find a Pareto optimal choice of hours of work and income distribution, the number of hours they work per year is


A) 600.
B) 700.
C) 900.
D) 250.
E) 350.

Correct Answer:

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