Robinson Crusoe can either fish (F) at a rate of 1 caught per 2 hours or pick Coconuts (C) at a rate of 1 picked per hour. He has 12 hours per day available for either activity. Describe his production possibilities. In this one person economy could this also be his budget line?
The table below describes utility that Crusoe gets from consuming fish and coconuts.
Quantity of Fish Total Utility Quantity of Coconuts Total Utility
0 0 0 0
1 40 1 24
2 70 2 44
3 90 3 60
4 102 4 72
5 110 5 80
6 116 6 84
7 120 7 86
8 122 8 87
9 123 9 87
10 123 10 87
11 123 11 87
12 123 12 87
A. Calculate marginal utilities.
B. What combination of the two should he produce (acquire with his income) to maximize utility?
C. If due to over-harvesting of coconuts they become more difficult to acquire, taking 2 hours to pick one coconut, what combination will maximize utility?
D. If it becomes easier to pick coconuts, specifically 2 can be picked per hour, what combination will maximize utility?
E. Draw Crusoe's "demand" curve for coconuts as the "price" varies from 2 hours to 1 hour to 1/2 hour.