PRINCIPLES OF MACROECONOMICS-CONNECT ACC
7th Edition
ISBN: 9781264088485
Author: Frank
Publisher: MCG
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Question
Chapter 2, Problem 6P
(a)
To determine
The maximum number of pounds of coffee beans and nuts that Tom and Susan can gather in a day.
(b)
To determine
Changes in the quantity of coffee and nuts if they decide to gather 8 pounds of coffee per day.
(c)
To determine
Whether a combination of 26 pounds of nuts and 20 pounds of coffee per day is attainable or not.
(d)
To determine
Whether a combination of 30 pounds of coffee per day and 12 pounds of nuts per day is attainable or not.
(e)
To determine
The
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Suppose there are two countries, Home and Foreign, that produce two goods, fish (F) and edamame (E), using only labor. In the Home country 6 units of labor are required to produce each unit of fish and the same for each unit of edamame. In the Foreign country, 2 units of labor is required to produce each fish and 3 units of labor are required for each unit of edamame. Each country has a labor force of 30 units available for production.
Suppose further that consumers in both countries have identical Leontief preferences, utility function U(CF, CE) = min(CF, CE), meaning that they want to consume the two goods in a fixed proportion of one-to-one, i.e. CF = CE (there is no substitution between the goods).
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Once again, consider Babs and Donna, who can each produce cake, beer, or some combination of
the two using only 40 hours of labor each. Babs can produce a maximum of 50 cakes if she
produces no beer, and 100 units of beer if she produces no cake. Donna can produce a maximum
of 100 cakes with no beer produced; if she makes no cake, she can produce 120 units of beer.
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Chapter 2 Solutions
PRINCIPLES OF MACROECONOMICS-CONNECT ACC
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