How many fish should robinson catch

Reference no: EM132208404

Question: Robinson Crusoe has decided that he will spend exactly 10 hours per day searching for food. He can spend this time looking for coconuts (C) or fish (F). He is able to catch 2 fish or find 3 coconuts in 1 hour. Robinson's utility function is U(F,C) = 3F0.6C0.3.

a) How many fish should Robinson catch and how many coconuts should he find so that his consumption maximizes his utility?

b) Illustrate the solution with a graph.

c) One day a native inhabitant of another island arrives on Robinson's island. The visitor offers Robinson trade of 3 fish for 1 coconut. However, trade is not free: regardless of the amounts traded, the trade costs 1 fish, which must be paid prior to the exchange.

1. Will Robinson decide to trade? Justify your answer.

2. What will Robinson produce?

3. What will Robinson consume?

4. If Robinson decides to trade, calculate his consumption levels of the two goods, and compare his prior-trade and post-trade utility levels.

d) Now assuming that Robinson's production possibility frontier is given by 100 = (F2)/4 + (C2)/9, answer point c again.

Reference no: EM132208404

Questions Cloud

Write a program in c to generate m random integers : Write a program in C to generate m random integers from an array of size n, such that the probability of selecting even elements is twice that of odd elements.

Write a program to calculate pi with a precision given : Write a program to calculate pi with a precision given by the user. The user should be able to put in 9, for example, and receive pi accurate to nine decimal

Why allocatively efficient price regulation impractical : First illustrate the difference between an unregulated natural monopoly's price and output decision and the outcome when government price regulation is imposed.

Display summary statistics for the current level : Write a program in C++ that generates a series of random equations and prompts the user to answer each equation generated.

How many fish should robinson catch : Robinson Crusoe has decided that he will spend exactly 10 hours per day searching for food. He can spend this time looking for coconuts (C) or fish (F).

Prompt the user for a voltage and a resistance : Write a program in C that prompts the user for a voltage and a resistance.

What effect would actions have on the value of the dollar : Suppose that foreigners decided that financial investments in the US were not a good idea. What would they do? What effect would these actions have.

What type of burn has matt received explain : On the first day after arriving in Miami for spring break vacation, Matt plays out in the sun for six hours. What type of burn has Matt received Explain

Write a program in c to find the largest of 32 : Write a program in C to find the largest of 32, 8-bit unsigned numbers in memory location $0800-$081F. Place the answer in $0820.

User Account

All Pages