Q 34

Peter's utility is U(c, d, h) = 2c + 9d - d^{2} - 6h, where d is the number of hours per day that he spends driving around, h is the number of hours per day spent driving around by other people in his home town, and c is the amount of money he has left to spend on other stuff besides gasoline and auto repairs. Gas and auto repairs cost $.50 per hour of driving. All the people in Peter's home town have the same tastes. If each citizen believes that his own driving will not affect the amount of driving done by others, they will all drive D_{1} hours per day. If they are all drive the same amount, they would all be best off if each drove D_{2} hours per day, where
A) D_{1} = 4 and D_{2} = 1.
B) D_{1} = 7 and D_{2} = 0.
C) D_{1} = 6 and D_{2} = 2.
D) D_{1} = D_{2} = 4.
E) D_{1} = 4 and D_{2} = 0.

Q 35

An airport is located next to a housing development. Where X is the number of planes that land per day and Y is the number of houses in the housing development, profits of the airport are 28X - X^{2} and profits of the developer are 20Y - Y^{2} - XY. Let H_{1} be the number of houses built if a single profit-maximizing company owns the airport and the housing development. Let H_{2} be the number of houses built if the airport and the housing development are operated independently and the airport has to pay the developer the total "damages" XY done by the planes to the profits of the developer.
A) H_{1} = H_{2} = 4.
B) H_{1} = 4 and H_{2} = 10.
C) H_{1} = 10 and H_{2} = 4.
D) H_{1} = 6 and H_{2} = 9.
E) H_{1} = 9 and H_{2} = 13.

Q 36

An airport is located next to a housing development. Where X is the number of planes that land per day and Y is the number of houses in the housing development, profits of the airport are 26X - X^{2} and profits of the developer are 22Y - Y^{2} - XY. Let H_{1} be the number of houses built if a single profit-maximizing company owns the airport and the housing development. Let H_{2} be the number of houses built if the airport and the housing development are operated independently and the airport has to pay the developer the total "damages" XY done by the planes to the profits of the developer.
A) H_{1} = 11 and H_{2} = 6.
B) H_{1} = H_{2} = 6.
C) H_{1} = 8 and H_{2} = 10.
D) H_{1} = 6 and H_{2} = 11.
E) H_{1} = 10 and H_{2} = 14.