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An island economy has 84 units of labor, with the production functions: x = 0.2Lx and y = 0.5Ly, where Lx and Ly are the
An island economy has 84 units of labor, with the production functions: x = 0.2Lx and y = 0.5Ly, where Lx and Ly are the labor allocations. The consumer on the island prefers to consume exactly one unit of x with each unit of y, and the more of these pairs the better. In this case, the consumer should allocate _____ units of labor towards producing good x. A: 44 B: 46 C:60 D:64 Robinson has a labor endowment of 80 units of labor and a utility function u(x,y) = min { 2x, 5y }. The production of good x is x = 2(Lx)0.5 and for y it is y = 4(Ly)0.5. For Robinson, the optimal amount of good x to produce is _____ units. A: 17.5 B: 15.5 C:12.1 D:10.1
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