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Robinson Crusoe has exactly 8 hours per day to spend gathering coconuts or catching fish.He can catch 3 fish per hour or he can pick 6 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.
A) His income is $24 and the price of fish is $3.
B) His income is $48 and the price of fish is $2.
C) His income is $72 and the price of fish is $3.
D) His income is $48 and the price of fish is $.33.
E) His income is $36 and the price of fish is $.33.
Utility Function
A formula that translates the bundle of goods and services selected by a consumer into a numerical value representing satisfaction or utility.
Coconut Consumption
Refers to the act of consuming coconuts or products derived from coconuts, influencing economic measures in regions where coconuts are a major commodity.
Competitive Market
A market structure characterized by a large number of buyers and sellers, where no single participant has significant influence on price.
- Comprehend the effect of time distribution among various tasks on productivity.
- Evaluate cases of resource allocation and its consequences on the welfare of the community.
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Learning Objectives
- Comprehend the effect of time distribution among various tasks on productivity.
- Evaluate cases of resource allocation and its consequences on the welfare of the community.
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