Question

. Robinson Crusoe spends 4 hours a day catching fish and picking coconuts, Hłe cn 2 fish per hour and he can always gather 3 coconuts per hour. His utility func nuts. He can always catch tion is CF, wh where C is the ere C is t number of coconuts eats choose to eat per day? e eats per day and F is the number of fish he eats per day. How many fish will he F C z.l

Answer 1

Number of fish caught = 2 fish per hour

Number of coconut collected = 3 coconut per hour

Total number of hours he spend is 4 hours per day

8 fish and 12 coconut

The equation of PPF can be written as

1 hour = 2 fish

1 hour = 3 coconut

2 fish per hour = 3 coconut per hour

1 F = 1.5C

1 C = 0.67 F

He will always attempt to maximize his utility therefore PPF

1F + 0.67C = 4

Since, 1C = 0.67F

1F = 1.5C

1.5C + 0.67C = 4

2.17C = 4

C = 1.85

Coconuts = 2 hours

Fish = 2 hours

So he collects 6 coconuts (=2 hours*3coconut/hour)

And catches 4 fish(=2hours*2fish/hour)

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