a) Assume a case where Anna works the land owned by Bob. By referring to the diagram above, explain how does Anna rank the possible allocations marked as X, Y, Z and A? b) Now assume a separate case whereby Anna is a slave to Bob. It is also given that Anna recently suffered from Corona virus and thus her nutrition needs are amplified- for more hours of work that she puts in, she requires more bushels of wheat, even just to survive. Draw a modified version of the diagram above to depict how Anna's biological survival constraint change in this case and also

a) Assume a case where Anna works the land owned by Bob. By referring to the diagram above, explain how does Anna rank the possible allocations marked as X, Y, Z and A? b) Now assume a separate case whereby Anna is a slave to Bob. It is also given that Anna recently suffered from Corona virus and thus her nutrition needs are amplified- for more hours of work that she puts in, she requires more bushels of wheat, even just to survive. Draw a modified version of the diagram above to depict how Anna's biological survival constraint change in this case and also

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.2P

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Figure shows the combined production function of Angela and Bruno. If the government introduces a new social welfare program to cater to the poor of the society, wherein the reservation wage increases from 2 bushels of wheat to 6 bushels of wheat how would you model the situation? Draw a new diagram to show the impact of this welfare program and comment on who do you think would benefit from this intervention? Additionally, does the outcome of this intervention results in an allocation which is a pareto efficient one? Explain your reasoning. (Please Make sure your diagram is fully labelled)
Weel explained answer needed no Ai The Coase Theorem states that: a) As long as property rights are well defined and no transaction costs exist, an efficient allocation will result b)As long as property rights are well defined and transaction costs are high, an efficient allocation will result. c)An efficient allocation will be equitable to all parties concerned. d)Property rights should initially be assigned to those affected by a negative externality.
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Consider the figure attached which shows the combined production function of Anna and Bob.Suppose Government has introduced a new social welfare program to cater to the poor of the society, wherein the reservation wage increases from 2 bushels of wheat to 6 bushels of wheat. Draw a new diagram to show the impact of this welfare program and comment on who do you think would benefit from this intervention? Additionally, does the outcome of this intervention results in an allocation which is a pareto efficient one? Explain your reasoning. (Make sure your diagram is fully labelled)
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Question-2 Draw two cases on a single well-labeled diagram to show how optimal allocation changes when Angela is a slave and when Angela is a tenant on the land owned by Bruno. Suppose Angela belongs to a low-income working-class household. On a new diagram, draw Angela’s reservation indifference curve and identify her wage and hours worked. Let’s change the rules of the scenario and assume that Angela is actually a wealthy industrialist for a farmer. Show her reservation indifference curve and identify her wage and hours worked. Are the number of hours worked in part a) and part b) the same? What specific assumption(s) about preferences is this outcome based on, and does it make intuitive sense? Imagine the poor and rich versions of Angela are fresh LUMS graduates with a CGPA of 3.89 and are applying for the same job position. Who do you think should get the job and why?
Question-2 Draw two cases on a single well-labeled diagram to show how optimal allocation changes when Angela is a slave and when Angela is a tenant on the land owned by Bruno. Suppose Angela belongs to a low-income working-class household. On a new diagram, draw Angela’s reservation indifference curve and identify her wage and hours worked. Let’s change the rules of the scenario and assume that Angela is actually a wealthy industrialist for a farmer. Show her reservation indifference curve and identify her wage and hours worked. Are the number of hours worked in part a) and part b) the same? What specific assumption(s) about preferences is this outcome based on, and does it make intuitive sense? Imagine the poor and rich versions of Angela are fresh Harvard graduates with a CGPA of 3.89 and are applying for the same job position. Who do you think should get the job and why?
Assume a case where Angela works the land owned by Bruno. By referring to the diagram above, explain how does Angela rank the possible allocations marked as X, Y, Z and A? [Slope at Y is equal to Slope at A]
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