Consider Robinson Crusoe who has to allocate hours between lying on the beach and climbing trees to gather coconuts. If is the time spent lying on the beach and is the number of coconuts Crusoe gathers, then Crusoe's utility is . If Crusoe spends hours climbing trees, then he earns coconuts. If he spends hours climbing trees, then he earns coconuts. How many hours should Crusoe spend climbing trees?
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Consider Robinson Crusoe who has to allocate 24 hours between lying on the beach and climbing trees to gather coconuts. If L is the time spent lying on the beach and C is the number of coconuts Crusoe gathers, then Crusoe's utility is min {L,C}. If Crusoe spends x≤ 8 hours climbing trees, then he earns x coconuts. If he spends x>8 hours climbing trees, then he earns 8+3(x-8)/2 coconuts. How many hours should Crusoe spend climbing trees? (A) 17.4 (B) 12 (C) 11.2 (D) 8
Also written as: Consider Robinson Crusoe who has to allocate 24 hours between lying on the beach and climbing trees to gather coconuts. If L is the time spent lying on the beach and C is the number of coconuts Crusoe gathers, then Crusoe's utility is min {L,C}. If Crusoe spends x<= 8 hours climbing trees, then he earns x coconuts. If he spends x>8 hours climbing trees, then he earns 8+3(x-8)/2 coconuts. How many hours should Crusoe spend climbing trees?
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This question is on General equilibrium with production, part of General equilibrium and exchange economies in Microeconomics.
Equilibrium when firms produce as well as consumers trade.
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Question from the DSE 2005 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.