a) Assume a case where Anna works the land owned by Bob. By referring to the diagram above, explain how does Anna rank the possible allocations marked as X, Y, Z and A? b) Now assume a separate case whereby Anna is a slave to Bob. It is also given that Anna recently suffered from Corona virus and thus her nutrition needs are amplified- for more hours of work that she puts in, she requires more bushels of wheat, even just to survive. Draw a modified version of the diagram above to depict how Anna's biological survival constraint change in this case and also
a) Assume a case where Anna works the land owned by Bob. By referring to the diagram above, explain how does Anna rank the possible allocations marked as X, Y, Z and A? b) Now assume a separate case whereby Anna is a slave to Bob. It is also given that Anna recently suffered from Corona virus and thus her nutrition needs are amplified- for more hours of work that she puts in, she requires more bushels of wheat, even just to survive. Draw a modified version of the diagram above to depict how Anna's biological survival constraint change in this case and also
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please solve b,c and d.
Transcribed Image Text:d) On a new and single, well-labelled diagram, you are
required to show a contrast of the point of allocation when
Anna is a slave vs when Anna is a tenant on Bob's land.
Briefly explain your reasons for the contrast that
depicted on the diagram and without using any
numbers/digits, in your own words, briefly explain whether
and how the pareto efficient outcome could be different in
you
these two cases?
![Consider the figure below which shows the combined
production function of Anna and Bob:
Wheat (bushels)
A
Y
Free-time (hours)
[slope at A = slope at Y ]
a) Assume a case where Anna works the land owned by Bob.
By referring to the diagram above, explain how does Anna
rank the possible allocations marked as X, Y, Z and A?
b) Now assume a separate case whereby Anna is a slave to
Bob. It is also given that Anna recently suffered from
Corona virus and thus her nutrition needs are amplified- for
more hours of work that she puts in, she requires more
bushels of wheat, even just to survive. Draw a modified
version of the diagram above to depict how Anna's
biological survival constraint change in this case and also
comment with brief reasoning whether Anna would be
better off on her altered biological survival constraint
compared to before?
c) Suppose a new scenario where the Government has
introduced a new social welfare program to cater to the
poor of the society, wherein the reservation wage increases
from 2 bushels of wheat to 6 bushels of wheat. Draw a new
diagram to show the impact of this welfare program and
comment on who do you think would benefit from this
intervention? Additionally, does the outcome of this
intervention results in an allocation which is a pareto
efficient one? Explain your reasoning. (Make sure your
diagram is fully labelled).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd05bf4f1-cea9-4a78-a441-bd4f2f3ab70c%2Fb5c38488-19b0-4a25-9dae-bf608ff39bbf%2Fdrp08ys_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider the figure below which shows the combined
production function of Anna and Bob:
Wheat (bushels)
A
Y
Free-time (hours)
[slope at A = slope at Y ]
a) Assume a case where Anna works the land owned by Bob.
By referring to the diagram above, explain how does Anna
rank the possible allocations marked as X, Y, Z and A?
b) Now assume a separate case whereby Anna is a slave to
Bob. It is also given that Anna recently suffered from
Corona virus and thus her nutrition needs are amplified- for
more hours of work that she puts in, she requires more
bushels of wheat, even just to survive. Draw a modified
version of the diagram above to depict how Anna's
biological survival constraint change in this case and also
comment with brief reasoning whether Anna would be
better off on her altered biological survival constraint
compared to before?
c) Suppose a new scenario where the Government has
introduced a new social welfare program to cater to the
poor of the society, wherein the reservation wage increases
from 2 bushels of wheat to 6 bushels of wheat. Draw a new
diagram to show the impact of this welfare program and
comment on who do you think would benefit from this
intervention? Additionally, does the outcome of this
intervention results in an allocation which is a pareto
efficient one? Explain your reasoning. (Make sure your
diagram is fully labelled).
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