Multiple Choice
Xavier and Yvette are the only two persons on a desert island. There are only two goods, nuts and berries. Xavier's utility function is U(Nx, Bx) = NxBx. Yvette's utility function is U(Ny, By) = 5Ny + By. Xavier is endowed with 4 units of berries and 13 units of nuts. Yvette is endowed with 6 units of berries and 8 units of nuts. In a competitive equilibrium for this economy, how many units of berries does Xavier consume?
A) 37.50
B) 69
C) 34.50
D) 32.50
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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