(10) Suppose the production possibility frontier for meat (M) and potatoes (P) is given by: 2P + 4M = 200 a. Suppose that people prefer to eat two potatoes with every pound of meat, how much of each product will be produced? b. Assuming that this economy is operating efficiently, what price ratio must prevail?

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter13: General Equilibrium And Welfare
Section: Chapter Questions
Problem 13.1P
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(10) Suppose the production possibility frontier for meat (M) and potatoes (P) is
given by:
2P + 4M = 200
a. Suppose that people prefer to eat two potatoes with every pound of meat, how
much of each product will be produced?
b. Assuming that this economy is operating efficiently, what price ratio must
prevail?
Transcribed Image Text:(10) Suppose the production possibility frontier for meat (M) and potatoes (P) is given by: 2P + 4M = 200 a. Suppose that people prefer to eat two potatoes with every pound of meat, how much of each product will be produced? b. Assuming that this economy is operating efficiently, what price ratio must prevail?
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