EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Question
Chapter 1, Problem 1.9P
To determine
To evaluate:The amount of each good to be produced to meet the goal of equal consumption and also show production point on a graph of the
b)
To determine
To evaluate:The possible combinations of X and Y, thecountry will consume in the given scenario.
c)
To determine
To evaluate:The final choice that the consumers of this country make as per the consumption possibilities outlined in (b).
d)
To determine
To evaluate:The cost imposed onthe country by
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Consider a trade economy with two people (A and B) and two goods (1 and 2). Person A's utility function
is U A = x1x2 where xi is A's consumption of good i E (1, 2). Person B's utility function is U B = y1 + y2,
where yi is B's consumption of good i = (1, 2). There are 20 units of each good in the economy. Which of
the following allocations are efficient?
(a) x1 = 10, x2 = 10, y1 = 10, y2 = 10.
(b) x1 = 7, x2 = 7, y1 = 13, y2 = 13.
(c) x1 = 0, x2 = 0, y1 = 20, y2 = 20.
(d) x1 = 15, x2 = 10, y1 = 5, y2 = 10.
(e) x1 = 12, x2 = 12, y1 = 6, y2 = 6.
The U.S. imports lumber among other goods from Canada. The lumber has been the topic of political dialogue between the 2 countries in the past few days. So let’s take X as ‘lumber’ and Y as ‘other goods’. Suppose the Canadian lumber and other exportable goods are produced with the following production Possibilities frontier (PPF): X2 + Y2 = 900 Suppose the U.S. utility function for the Canadian lumber, X, and other exportable goods, Y, is: U = X Y a. Derive the conditions necessary to determine the ‘Optimal Product Mix’ discussed in chapter 10. b. Draw the PPF (partial just the first quadrant) with Y on the vertical axis. On the same graph, draw at least one indifference curve so as to show the “optimal product mix’. Can this graph represent the ‘pure exchange’ economy? Explain why or why not. c. Now draw in a price line that can make the ‘optimal product mix’ a competitive exchange equilibrium. Can…
a) Draw a production possibilities frontier (PPF) for a society that produces two goods, guns and wheat.
Suppose this society has two political parties, party R (who want a strong military) and party L (who want a smaller military). Show points on your diagram that party R and party L chooses.
b) Show graphically whether your PPF will change if all the resources used for both the goods were equally suitable for production of guns and wheat?
c) Assuming that b stands and if all the resources are used for the production of guns, 20 guns can be produced and if all the resources are used for production of wheat, 80 units of wheat can be produced, then what is the opportunity cost of producing one gun?
Chapter 1 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 1.2 - Prob. 1MQCh. 1.2 - Prob. 2MQCh. 1.3 - Prob. 1TTACh. 1.3 - Prob. 2TTACh. 1.4 - Prob. 1TTACh. 1.4 - Prob. 2TTACh. 1.4 - Prob. 1MQCh. 1.4 - Prob. 2MQCh. 1.4 - Prob. 1.1MQCh. 1.4 - Prob. 1.2MQ
Ch. 1.5 - Prob. 1TTACh. 1.5 - Prob. 2TTACh. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 8RQCh. 1 - Prob. 9RQCh. 1 - Prob. 10RQCh. 1 - Prob. 1.1PCh. 1 - Prob. 1.2PCh. 1 - Prob. 1.3PCh. 1 - Prob. 1.4PCh. 1 - Prob. 1.5PCh. 1 - Prob. 1.6PCh. 1 - Prob. 1.7PCh. 1 - Prob. 1.8PCh. 1 - Prob. 1.9PCh. 1 - Prob. 1.10P
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