EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 10, Problem 10.9P
a)
To determine
According to figure Edgeworth box is to be drawn with the help of total quantities of capital and labor.
b)
To determine
supposing the lower left corner of the box to be the origin for the isoquant map for good x then a few of the X isoquants is to be drawn.
c)
To determine
considering the upper right corner of the box to be the origin for the origin for the isoquant map for good Y then few Y isoquants in the Edgeworth box is to be drawn.
d)
To determine
Efficient points in the box is to mentioned and efficient conditions for given allocation of K and L is to be described.
e)
To determine
The
f)
To determine
By using the connection between box diagram and the production possibility frontier some cases are to be discussed.
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Let assume, you live in an economy where two goods are being produced (say x and y) and labor can
be allocated in the production of either good freely, but the other factor is specific. For your more
information, good X" can be produced with labor and capital and good "y" can be produced with labor
and land.
Given the situation,
a) How much does the each good the economy produced?
b) How much labor will be employed in each sector?
Suppose the fictional country of Everglades produces two types of goods: agricultural and capital. The following diagram shows its current production
possibilities frontier for millet, an agricultural good, and telephoto lenses, a capital good.
Drag the production possibilities frontier (PPF) on the graph to show the effects of a long drought that reduces the amount of water available for
farmers to use for irrigation.
Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will
snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther.
TELEPHOTO LENSES (Thousands)
360
300
240
100
120
60
.
10
PPF
20
30
40
MILLET (Millions of bushels)
50
60
PPF
Suppose two economies Home (H) and Foreign (F) produce two goods, bread and wine, with only one production factor: labour. Production technology, expressed as marginal product of labour (MPL), is given in the following table:
Technologies expressed as MPL
Bread
Wine
Home
1/6
1/12
Foreign
1/4
1/2
Suppose that Home has 2400 units of labour and Foreign has 1800 units of labour.
a. ) Derive the Production Possibilities Frontier (PPF) and the Consumption Possibility Frontier (CPF) for Home and Foreign, with bread on the horizontal axis and wine on the vertical axis. What is the autarky equilibrium price of bred relative to wine in each country?
b.) What country has the absolute advantage in producing each good? What country has the comparative advantage in producing each good? Briefly explain the difference between these two concepts. Suppose both countries are now free to trade. The world relative price of bread is 1.
c. What is the pattern of specialisation and trade?…
Chapter 10 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 10.2 - Prob. 1MQCh. 10.4 - Prob. 1MQCh. 10.4 - Prob. 2MQCh. 10.4 - Prob. 1.1MQCh. 10.5 - Prob. 1TTACh. 10.5 - Prob. 2TTACh. 10.7 - Prob. 1MQCh. 10.7 - Prob. 2MQCh. 10.7 - Prob. 3MQCh. 10.8 - Prob. 1TTA
Ch. 10.8 - Prob. 2TTACh. 10.8 - Prob. 1MQCh. 10.8 - Prob. 2MQCh. 10 - Prob. 1RQCh. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Prob. 7RQCh. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 10RQCh. 10 - Prob. 10.1PCh. 10 - Prob. 10.2PCh. 10 - Prob. 10.3PCh. 10 - Prob. 10.4PCh. 10 - Prob. 10.5PCh. 10 - Prob. 10.6PCh. 10 - Prob. 10.7PCh. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Prob. 10.10P
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