An economy has 8 units of labor and 8 units of capital that are allocated between industry X, with the DRTS production function x = K^(1/4)L^(1/4), and industry Y, with the CRTS production function y = K^(1/2)L^(1/2). Derive and graph the Production Possibilities Frontier for this economy. All consumers believe X and Y are perfect complements with tastes U = min (Y, 2X). Calculate production levels that are consistent with tastes and show these in your diagram.
Q: A company sells one of its products for $10.40 per unit. Its fixed costs are $1,560 per month, and…
A: Initial Selling Price = 10.40 Fixed Cost = 1560 variable Cost = 3.90 Selling Price for Part B is…
Q: Refer to Figure 9-2. With free trade, what would consumer surplus in China be? $1600 $900 $400 $800…
A: In economics, consumer suplus is the difference between the price a consumer pays for an product and…
Q: Solve it correctly please. I ll rate accordingly. Explain well and typed answer only. Consider…
A: As given Demand : P = 50 -Q and Total cost = 15q As Cournot duopolies Q = q1 + q2 and Profit =…
Q: When two cats, Euclid and Jamie, play together, their game involves facing each other while several…
A: An equilibrium point for a game where both players employ mixed strategies is a pair of mixed…
Q: True or false. Monopolist can control the price.
A: A monopoly refers to a market in which there is only one seller that deals in a product that has no…
Q: 11. Country A's currency can depreciate only when compared to country B's currency. a. True b.…
A: A currency is a medium of exchange that is used to buy and sell goods and services. It is a form of…
Q: Use the supply and demand analysis of the market for reserves to visually illustrate and explain how…
A: The discount rate is the interest rate that a central bank charges on loans of reserve funds to…
Q: In the class, we talked about the determinants of current account. Which of the following is usually…
A: The current account tracks a country's money inflows and outflows over the course of a year. Trading…
Q: A stronger Mexican peso is less favourable for: Select one: O a. American tourists traveling in…
A: A currency is said to be appreciated when it gains its value in term of other currency. . A currency…
Q: the value of the swap
A: An interest rate swap is a contract between two counterparties who agree to exchange the future…
Q: Total Output (Q) (Pounds) (1) 0 100 250 320 380 380 420 430 Price per Pound ($2.00) (2) $2.00 $2.00…
A: firm's objective is to maximize the profit level which is measured as the difference between revenue…
Q: A manufacturer has been selling 1750 television sets a week at $420 each. A market survey indicates…
A: Demand - In an economy demand is the quantity of the good that consumers are willing to buy at…
Q: 1. A society with an income Gini Coefficient value close to 1... a. Represents absolute equality b.…
A: The Gini Coefficient is commonly used to measure income inequality in a country, but it can also be…
Q: Suppose a bank has $500 million in deposits and $35 million in required reserves, and it is holding…
A: Reserves are the part of bank stores that banks hold yet don't credit out accordingly.
Q: Describe the primary areas of Kanto Region's infrastructure and the features it possesses
A: Kanto Region is situated in the eastern part of Honshu Japan. It is sometimes referred to as the…
Q: Using data from a nation's census, an economist produced the following Lorenz curves for the…
A: The Lorenz Curve depicts an economy's income distribution, whereas the Gini Coefficient quantifies…
Q: Suppose a monopolistically competitive firm is producing at the profit-maximizing output level and…
A: Monopolistically competitive market refers to a market scenario in which there are many sellers in…
Q: ABC Manufacturing has determined that the demand function for their heated socks is given by: D(p)…
A: Since you have asked a question with multiple sub-parts, we will solve the first three sub-parts for…
Q: The case of transaction exposure is described as follows. Choose the correct answer in the…
A: The exchange rate of a currency fluctuates due to various reasons which include, the interest rate,…
Q: (c) Let r(t), t > 0, be an instantaneous interest rate which is a non-decreasing and differentiable.…
A: The yield curve is the graphical representation of the relationship between interest rates, i.e. the…
Q: Construction equipment has a cost today of $40,000. If its cost has increased by only the inflation…
A: Provided information: A construction equipment costs $40000 in the present period => Present cost…
Q: A consumer is faced with the following utility function, U(x1 x2)=(xp1 1+xp2)1/p, where 0<p<1. The…
A: In the theory of optimization, constrained optimization is the mathematical process of optimizing an…
Q: construct the cost schedule for a firm operating in the short run b) Graph the average variable…
A: At zero level of quantity, total cost and total fixed cost are equal, and total variable cost is…
Q: Define the difference between moral hazard and adverse selection using an example. .
A: Moral hazard occurs when one party participates in a risky activity while aware that it is protected…
Q: What makes the Earned Income Tax Credit (EITC) different from other poverty-fighting programs? The…
A: The Earned Income Tax Credit (EITC) is a policy of refundable tax credit for low- to moderate-…
Q: If a government of a country with a zero trade balance increases its budget deficit, then what will…
A: The budget balance is the variety between what a country's government procures from charges and…
Q: Refer to Figure 6-4. With a price ceiling present in this market, what will happen when the supply…
A: Price ceiling is the price set by government which is maximum that can be charged from the consumer.…
Q: Emily and Brooklyn are competitors in a local market. Each is trying to decide if it is better to…
A: Provided information: According to the given information in the text, the pay-off matrix of person-E…
Q: 6.11 Explain why there can never be a No-Show Paradox in an election using the following voting…
A: Voting is a political act that has been described in a variety of ways. According to a sociological…
Q: The manufacturer of smart printers is trying to decide what price to set for its product. The…
A: To maximize profits, the firm will be setting the marginal cost equal to marginal revenue.
Q: What variable makes the relevance/link between loanable funds market and market for foreign-…
A: The money that are available to be borrowed are referred to as "loanable funds," and this phrase is…
Q: A.3 Own Price Elasticity Question 1: The demand for Wanderlust Travel Services (good X) is estimated…
A: A good's price elasticity of demand is a measure of how sensitive the quantity demanded is to its…
Q: Question 7 Currently which of the following best describes Unfair Labor Practices? O Behaviors by…
A: Unfair Labor Practices refers to several acts by a labor organization or employer that violate a…
Q: Choose all the options below that demonstrate a contractionary fiscal policy. Select all that apply:…
A: Contractionary fiscal policy is a sort of fiscal policy wherein the public authority gathers more…
Q: Consider a strip mall in Jackson Heights, Queens that recently sold for a cap rate of 9.17%. It's…
A: You need to know the current net operating income (NOI), the projected annual growth rate in NOI,…
Q: iven a demand function of Q = 20 - 2P, and the price range for which; Demand is elastic
A: As per the question the demand function is basically given to be as Q= 20-2P. Demand function is…
Q: For each of the events describe below, you are required to explain: 1. The market you are…
A: The forces of supply and demand determine the equilibrium value of a good's price and quantity in a…
Q: The short-run price elasticity of demand for gasoline is 0.5, and the long-run price elasticity of…
A: What is price elasticity of demand? Price elasticity of demand is the ratio of the percentage change…
Q: Refer to the Figure 4-8. The graph shows the demand for cigarettes. Which most likely happened?…
A: The demand curve depicts the inverse relationship between the price of a product and the quantity…
Q: Question 7 If the Bond yield is higher than the inflation rate O the redemption value won't be…
A: First we have to know the term bond yield which shows the investment of capital to the bond.…
Q: what are keynes 3 alternative graphs/sectors.
A:
Q: this is about Introduction to Decisions Under Certainty on engineering economics subject.. please…
A: The present value is the current value of a future cash flow or series of future cash flows,…
Q: Express Scripts has $2,023 million of inventory. Their holding cost is 31%. What is the total annual…
A: Given, Inventory = $2,023 million Holding Cost = 31%
Q: If a government of a country with a zero trade balance increases its budget deficit, then what will…
A: IS-LM model under an open economy: For an open economy country, the product market equilibrium…
Q: Estimate the value of money multiplied if the LRR is 19℅
A: LRR is the legal reserve ratio. The banks have to keep a portion of their deposits as reserves and…
Q: The manufacturer of smart printers is trying to decide what price to set for its product. The…
A: A monopolistic competitive market is the market in which there are large nuumber of buyers and…
Q: Which point or points in the following Production Possibilities Model represent(s) the current…
A: The production possibilities frontier will be describing two types of efficiency: productive…
Q: w=180 b=0.75 g=90 tax=90 nx=-50 i=300-10r central bank reserves are gold=100 f. currencies 200…
A: The expenditure method is one of the three methods of calculating a country's GDP in a given fiscal…
Q: Explain why the industry supply curve is not the long-run industry marginal cost curve. The industry…
A: The link between marginal revenue and average cost is frequently graphically represented as the…
Q: Using the table below and 2000 as the base year, choose the statement holding true Year 2000 2022…
A: CPI( Consumer Price Index) measures the change in prices of a basket that people or consumers have…
An economy has 8 units of labor and 8 units of capital that are allocated between industry X, with the DRTS
production function x = K^(1/4)L^(1/4), and industry Y, with the CRTS production function y = K^(1/2)L^(1/2). Derive and graph the Production Possibilities Frontier for this economy. All consumers believe X and Y are perfect complements with tastes U = min (Y, 2X). Calculate production levels that are consistent with tastes and show these in your diagram.
Step by step
Solved in 3 steps with 2 images
- Consider an economy that produces two goods , X and Y. Use a production box diagram to construct the production possibility frontier for these two goods. Also indicate the optimal consumption point and price ratio that will prevail. Suppose now that technical progress causes the X isoquants to shift towards the origin. How will this affect the production possibility frontier, the optimal consumption point and equilibrium price ratio for X and YWhich of the following is true in the markets for factors of production in the circular-flow diagram, a. households provide firms with labor, land, and capital. b. households provide firms with savings for investment. c. firms provide households with goods and services. d. firms provide households with revenue.Not a previously graded question. Suppose the fictional country of Katmai produces only two goods: millet and microprocessors. The following graph plots Katmai's current production possibilities frontier, and includes six different output combinations given by black points (plus symbols) labeled A to F. Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, or unattainable. Check all that apply.
- 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…The productive capability of an economy is such that to produce 5 units of military good it takes 2 workers to be employed while 10 units of consumer goods require 3 workers. Resources are limited in such a way that only 75 units of military good can be produced when all resources are employed. a) Construct the production possibility schedule and curve for this economy. b) Graphically represent what would happen if 12 additional workers were added to the economy. c) Graphically represent what would happen if the productivity of the workers were reduced to 2 units of military good and 5 units of consumer goods. d) Graphically represent what would happen if productivity for military goods remained the same but it now required 2 workers to produce 10 units of consumer goodsDistinguish between Micro and Macroeconomics The production possibility frontier indicates the various combinations of output that an economy can produce given the available factors of production and technology; Explain any five assumptions of the production possibility frontier Using the concept of production possibility curve, explain how it can be used to show the relationship between scarcity, choice, opportunity cost and efficiency Explain any five factors that may cause change in the shift of the production possibility curve
- There are two firms in the economy. Each firm employs positive amounts of capital and labour. The technology satisfies diminishing marginal rate of technical substitution of labour for capital. Currently, A’s marginal rate of technical substitution of labour for capital is 4 while B’s marginal rate of technical substitution of labour for capital is 2. A. Is the current production of the two firms efficient? If not, describe an exchange of inputs that would improve efficiency. B. Can these production levels of the two firms be observed in a perfectly competitive equilibrium of a production and exchange economy? Explain.Which of the following statements are true? A basic assumption of the theory of production is that: A firm cannot borrow money to finance its input expenditures. A firm can buy as much labor and capital as it desires in the long-run A firm can reduce the number of workers it uses, but it cannot adjust how much capital it uses in the short-run When the marginal product of labour starts falling, the firm must cease production a. II only b. II and III c. I, III and IV d. II, III and IVIn 2018, sizeable lithium deposits were discovered in Germany. Suppose that prior to the discovery of new lithium deposits, Germany was operating on its PPF. The discovery of new lithium deposits in Germany _____. After this discovery, if Germany's production did not change, Germany would be operating _____. -SHIFTED Germany's PPF; efficiently -moved Germany ALONG its PPF; inefficiently -SHIFTED Germany's PPF; inefficiently -moved Germany ALONG its PPF; efficiently
- Suppose that initially Denali uses 1 million hours of labor per week to produce pistachios and 3 million hours per week to produce chinos, while Sequoia uses 3 million hours of labor per week to produce pistachios and 1 million hours per week to produce chinos. As a result, Sequoia produces 24 million pounds of pistachios and 32 million pairs of chinos, and Denali produces 12 million pounds of pistachios and 72 million pairs of chinos. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of pistachios and chinos it produces. Sequoia's opportunity cost of producing 1 pound of pistachios is4 pairs of chinos, and Denali's opportunity cost of producing 1 pound of pistachios is2 pairs of chinos. Therefore,Sequoia has a comparative advantage in the production of pistachios, andDenali has a comparative advantage in the production of chinos. Suppose that each country…The boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology is called ________.The following graph shows a variety of possible production functions (PFs) in an imaginary economy, assuming constant levels of human capital and capital stock. Because human capital and capital stock remain unchanged, each of these production functions represents a different level of the technology. The slope of the line connecting the origin to point A is _______ (options: steeper, flatter) than the slope of the line connecting the origin to point B, because the slope of such a line is equivalent to __________ (options: the marginal physcial product of labor, marginal cost, productivity).