Question Mary and Jason are a new couple trying to understand their family production plans. Suppose they conduct two types of production: household production (HP) and market production (MP). If Mary carries out household production, her production value is equivalent to $20 each hour. If she does market production, she gets paid $15 each hour. Jason's production value is $12 per hour if he does household production. If he does market production, he gets paid $25 per hour. Assume Mary and Jason each work 8 hours on a typical workday. a) Calculate and depict Mary and Jason's daily production possibilities. b) Assume Mary and Jason conduct market production, only. Calculate and depict the family production possibility. If they wish to keep some household production, who shall do it, and what will be the new production possibility? Show it in a graph. c) Alternatively, if Mary and Jason conduct household production only, what would be the family production possibility? If they wish to keep some market production, who should do it, and what will be the new production possibility? Show it in a graph. d) If Mary and Jason pool their resources (time) and split the time equally between household production and market production, what would be the family production possibilities? Show them in a graph. e) Is there a gain for Mary and Jason to collaborate? If so, show it in a diagram. f) Briefly discuss two potential disadvantages of specialization and exchange. g) Suppose despite their specialization, Mary prefers household production and Jason prefers market work. Construct a proper diagram to describe Mary and Jason's general work preferences and explain why.
Question Mary and Jason are a new couple trying to understand their family production plans. Suppose they conduct two types of production: household production (HP) and market production (MP). If Mary carries out household production, her production value is equivalent to $20 each hour. If she does market production, she gets paid $15 each hour. Jason's production value is $12 per hour if he does household production. If he does market production, he gets paid $25 per hour. Assume Mary and Jason each work 8 hours on a typical workday. a) Calculate and depict Mary and Jason's daily production possibilities. b) Assume Mary and Jason conduct market production, only. Calculate and depict the family production possibility. If they wish to keep some household production, who shall do it, and what will be the new production possibility? Show it in a graph. c) Alternatively, if Mary and Jason conduct household production only, what would be the family production possibility? If they wish to keep some market production, who should do it, and what will be the new production possibility? Show it in a graph. d) If Mary and Jason pool their resources (time) and split the time equally between household production and market production, what would be the family production possibilities? Show them in a graph. e) Is there a gain for Mary and Jason to collaborate? If so, show it in a diagram. f) Briefly discuss two potential disadvantages of specialization and exchange. g) Suppose despite their specialization, Mary prefers household production and Jason prefers market work. Construct a proper diagram to describe Mary and Jason's general work preferences and explain why.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Could you solve d, e, and f please?
Transcribed Image Text:Question Mary and Jason are a new couple trying to understand their family production plans.
Suppose they conduct two types of production: household production (HP) and market production
(MP). If Mary carries out household production, her production value is equivalent to $20 each
hour. If she does market production, she gets paid $15 each hour. Jason's production value is $12
per hour if he does household production. If he does market production, he gets paid $25 per hour.
Assume Mary and Jason each work 8 hours on a typical workday.
a) Calculate and depict Mary and Jason's daily production possibilities.
b) Assume Mary and Jason conduct market production, only. Calculate and depict the family
production possibility. If they wish to keep some household production, who shall do it,
and what will be the new production possibility? Show it in a graph.
c) Alternatively, if Mary and Jason conduct household production only, what would be the
family production possibility? If they wish to keep some market production, who should
do it, and what will be the new production possibility? Show it in a graph.
d) If Mary and Jason pool their resources (time) and split the time equally between household
production and market production, what would be the family production possibilities?
Show them in a graph.
e) Is there a gain for Mary and Jason to collaborate? If so, show it in a diagram.
f) Briefly discuss two potential disadvantages of specialization and exchange.
g) Suppose despite their specialization, Mary prefers household production and Jason prefers
market work. Construct a proper diagram to describe Mary and Jason's general work
preferences and explain why.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education