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Sheila and Ivan Live in an Isolated Valley and Trade

Question 26

Multiple Choice

Sheila and Ivan live in an isolated valley and trade with no one but each other.They consume only apples and oranges.Sheila has an initial endowment of 6 apples and 19 oranges.Ivan has an initial endowment of 18 apples and 20 oranges.For Sheila, the two goods are perfect substitutes, one for one.For Ivan, they are perfect complements, one for one.At all Pareto efficient allocations,


A) Sheila must consume at least 25 oranges.
B) the slopes of the two traders' indifference curves are the same.
C) Ivan must consume 17.50 apples.
D) Sheila must consume at least 15 oranges.
E) Ivan must consume all of the apples.

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