Multiple Choice Questions: Choose the Best Answer. 1. Suppose that the two persons in an exchange economy ( and ) have utility functions given by

(,)=4, (,)=2+2. Along the contract curve, 's ratio of to will be

a) 2:1 b) 1:1 c) 1:2 d) between 1:1 and 1:2

e) none of the above

2. Consider a firm composed of 5 workers, each with a utility function of the form () = ²

where is hours worked and is the wage. Suppose the firm can monitor the number of hours worked by each worker and pays them = $20 per hour. How many hours will each worker choose to work?

a) 2 b) 4 c) 6 d) 8

e) none of the above