9. A Suppose another economy has two goods: iron and copper. The production of one unit of iron requires 0.1 units of iron and 0.2 units of copper. The production of one unit of copper requires 0.8 units of iron and 0.6 units of copper. What is the demand met by producing 50 units of iron and 40 units of copper? B. Using the same technology matrix as the previous problem, find the production schedule required to meet a demand of 200 units of iron and 100 units of copper.

9. A Suppose another economy has two goods: iron and copper. The production of one unit of iron requires 0.1 units of iron and 0.2 units of copper. The production of one unit of copper requires 0.8 units of iron and 0.6 units of copper. What is the demand met by producing 50 units of iron and 40 units of copper? B. Using the same technology matrix as the previous problem, find the production schedule required to meet a demand of 200 units of iron and 100 units of copper.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.3P

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Assume an economy produces only two goods ( shoes and computers ) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum. Production in this economy is subjected to the laws of diminishing marginal returns and resources are assumed to be fully optimized. In addition, the cost of sacrificing shoes for computers and vice versa is 1. On the basis of the forgoing assumptions , ( i )economy's production possibility frontier on hindsight of the relevant assumption ( ii ) why the points outside the frontier unattainable? ( III ) identify three ways by which the economy can attain the level of production outside the production possibility frontier. ( iv ) what happens to the production possibility frontier when the economy discovers an improved technology for shoes ( v ) what happens to the production possibility frontier when technological change overwhelmingly favors the production of computers. ( vi ) assume now the sacrifice…
Assume an economy produces only two goods ( shoes and computers ) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum. Production in this economy is subjected to the laws of diminishing marginal returns and resources are assumed to be fully optimized. In addition, the cost of sacrificing shoes for computers and vice versa is 1. On the basis of the forgoing assumptions , ( i )economy's production possibility frontier on hindsight of the relevant assumption ( ii ) why the points outside the frontier unattainable? ( iv ) what happens to the production possibility frontier when the economy discovers an improved technology for shoes ( v ) what happens to the production possibility frontier when technological change overwhelmingly favors the production of computers. ( vi ) assume now the sacrifice ratio is greater than 1, show what will happen to the shape of the production possibility frontier. (vii) mention two conditions…
Assume an economy produces only two goods ( shoes and computers ) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum. Production in this economy is subjected to the laws of diminishing marginal returns and resources are assumed to be fully optimized. In addition, the cost of sacrificing shoes for computers and vice versa is 1. On the basis of the forgoing assumptions , drawthe economy's production possibility frontier on hindsight of the relevant assumption and why the points outside the frontier unattainable?.
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Assume an economy producing only two goods (shoes and computers) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum. Production in this economy is subjected to the law of diminishing marginal returns and resources are assumed to be fully optimized. In addition, the cost of sacrificing shoes for computers and vice versa is 1. On the basis of the foregoing assumptions, answer the following questions: i. Draw the economy’s production possibility frontier on hindsight of the relevant assumption. What happens to the PPF when technological change overwhelmingly favours the production of computers? What happens to the PPF when the economy discovers an improved technology for producing shoes? Assume now that the sacrifice ratio is greater than 1, show what will happen to the shape of the production possibility frontier. vii. Mention three (3) conditions under which the sacrifice ratio between the goods will be…