Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Chapter 3, Problem 2Q
To determine
The implication of optimization for economic agents.
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Robinson Crusoe has exactly 12 hours per day to spend gathering coconuts (
C) or catching fish (F). Let tp denote the time (in hours) spent catching fish and
tc the time (in hours) spent gathering coconuts per day. Robinson can catch 3
fish per hour or he can gather 6 coconuts per hour; his "production technology"
can thus be described by: F = 3tp and C = 6tc. Robinson's utility function is
U(F,C) = FC where F is his consumption of fish and C is his consumption of
coconuts.
1.
(a) Write down Robinson's time constraint and hence find an equation for his
Production Possibility Frontier (PPF).
(b) Find the number of fish Robinson will catch per day and the number of
coconuts he will gather per day.
Chapter 3 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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