Robinson Crusoe has exactly 16 hours per day to spend gathering coconuts or catching fish. He...

 

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Robinson Crusoe has exactly 16 hours per day to spend gathering coconuts or catching fish. He can catch 4 fish per hour or he can pick 12 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. What is the price of fish and what is his income (at competitive equilibrium prices)? Robinson Crusoe has exactly 16 hours per day to spend gathering coconuts or catching fish. He can catch 4 fish per hour or he can pick 12 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. What is the price of fish and what is his income (at competitive equilibrium prices)?

Answer rating: 100% (QA)

To determine the price of fish and Robinson Crusoes income at competitive equilibrium prices we need ... View the full answer