10.3. Suppose the production possibility frontier for guns (X) and butter (Y) is given by x² + 2Y? = 900 a. Graph this frontier. b. If individuals always prefer consumption bundles in which Y = 2X, how much X and Y will be produced? c. At the point described in part b, what will be the slope of the production possibility frontier, and what price ratio will cause production to take place at that point? (Hint: By using the approach in the numerical exam- ples in this chapter, show that the slope of this pro- duction possibility frontier is -X/2Y.) d. Show your solution on the figure from part a.
10.3. Suppose the production possibility frontier for guns (X) and butter (Y) is given by x² + 2Y? = 900 a. Graph this frontier. b. If individuals always prefer consumption bundles in which Y = 2X, how much X and Y will be produced? c. At the point described in part b, what will be the slope of the production possibility frontier, and what price ratio will cause production to take place at that point? (Hint: By using the approach in the numerical exam- ples in this chapter, show that the slope of this pro- duction possibility frontier is -X/2Y.) d. Show your solution on the figure from part a.
Chapter13: General Equilibrium And Welfare
Section: Chapter Questions
Problem 13.1P
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![10.3. Suppose the production possibility frontier for guns
(X) and butter (Y) is given by
X² + 2Y2 = 900
a. Graph this frontier.
b. If individuals always prefer consumption bundles
in which Y = 2X, how much X and Y will be
produced?
c. At the point described in part b, what will be the slope
of the production possibility frontier, and what price
ratio will cause production to take place at that point?
(Hint: By using the approach in the numerical exam-
ples in this chapter, show that the slope of this pro-
duction possibility frontier is -X/2Y.)
d. Show your solution on the figure from part a.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faee09ca8-3e23-46f8-a53c-30097f554968%2Ffa8e888d-91ae-48ea-83cf-b66de1553637%2Fod249tk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:10.3. Suppose the production possibility frontier for guns
(X) and butter (Y) is given by
X² + 2Y2 = 900
a. Graph this frontier.
b. If individuals always prefer consumption bundles
in which Y = 2X, how much X and Y will be
produced?
c. At the point described in part b, what will be the slope
of the production possibility frontier, and what price
ratio will cause production to take place at that point?
(Hint: By using the approach in the numerical exam-
ples in this chapter, show that the slope of this pro-
duction possibility frontier is -X/2Y.)
d. Show your solution on the figure from part a.
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