Suppose that every consumer is on his/her budget constraint where MRS = 0.1, the price of good X is $2, the price of good Y is $1 and fırms are operating on the PPF where MRT = 4. Assume the PPF is concave. 1. To increase efficiency, consumers should consume [ Select ] of good X; [ Select ] of good Y. 2. To increase efficiency, firms should produce [ Select ] of good X; [ Select ] of good Y.
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![Suppose that every consumer is on his/her budget constraint where MRS = 0.1, the price of good X
is $2, the price of good Y is $1 and firms are operating on the PPF where MRT = 4. Assume the PPF
is concave.
1. To increase efficiency, consumers should consume
[ Select ]
of good X;
[ Select ]
of good Y.
2. To increase efficiency, firms should produce [ Select ]
of good X;
[ Select ]
of good Y.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F97cd3de0-db7d-4d98-a98d-31ce987bbbb3%2F85013476-f29d-4983-b1a8-af40f2151909%2Frmapz1f_processed.jpeg&w=3840&q=75)
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- Question 21Based on the given PPF for a country, which of the following is an example of a point that is unattainable? 6 units of good X and 30 units of good Y. 0 units of good X and 30 units of good Y. 2 units of good X and 18 units of good Y. 6 units of good X and 18 units of good Y. Question 23The "law of demand" states that: Other thing remaining the same, the higher the price of a good, the smaller is the quantity demanded. the higher consumers' incomes, the greater is the demand. the higher the price of a good, the higher is the quantity demanded. the higher the price of a good, the lower is the demand for this good. Question 24The price elasticity of demand for oranges ___ change if the units of the quantity were changed from pounds to kilograms and ___ change if the units of the price were changed from dollars to cents. D) would not; would not C) would not; would A) would; would B) would; would not Question 25 Given this market for roses, what are the equilibrium price…Below is an edgeworth box of two individuals, Ross and Rosa, in the consumption of two goods, X and Y 1. Consider allocations b-f (meaning points a, b, and f). Which allocations(s)A. are better for Ross than “a” (ignoring Rosa)?B. are better for Rosa than “a” (ignoring Ross)?C. are worse for both Ross and Rosa than “a”?D. are better for both Ross and Rosa than “a”?E. are Pareto superior to “a”?2. Suppose that the initial allocation is point a between Ross and Rosa.A. Discuss how Ross’s condition be made better off without harming Rosa(i.e., Rosa maintains her level of utility).B. Illustrate this in a separate diagram and label point/s as necessary (also,if other point/s will have to be made or incorporated).3. Consider once again that the initial allocation is point a. A. Discuss (very briefly) how point d is reached as a Pareto efficientallocation between Ross and Rosa.B. illustrate this condition in a separate diagram.4. Consider points b, c, d, and e. Now plot the utility…Consider your preferences for Gasoline (X) and a composite good (Y). Your utility function is U(X,Y) = X^(2/5 )+ Y^(2/5). You have an annual income of $40,000. Suppose the price of the composite good is $1. a) Due to shortages, the government has introduced a rationing system such that you can only consume a maximum of 5,000 liters a year at $1 a liter. What would be your optimal consumption bundle? b) The government removes the rationing system and the free market price of gasoline jumps to $2. What would be your new optimal consumption bundle? Are you better off with or without the rationing? Show by finding the utility levels. c) Illustrate your solution in a clearly labeled graph.
- Consider a simple economy consisting of two countries, England and France. England has 25 workers and France has 75 workers. England can produce 4 units of grain and 2 units of cloth with each unit of labor. France can produce 1 unit of grain and 1 unit of cloth with each unit of labor. Wages per unit of labor are the same in both countries. c. Assume that consumers have utility ?=?????^(1/2) ⋅????ℎ^(1/2). How much does each country produce and consume of each good in autarky? Show the consumption graphically by drawing the indifference curves into your two diagrams. d. Now allow for trade. How much does each country produce and consume of each good in this case? Draw the new production possibilities frontier, indifference curves, and equilibrium point into your two diagrams, and indicate exports and imports. e. What is the utility of consumers in each country under free trade? How much does utility change relative to autarky?Chris and Dana live in an exchange economy with two goods: good Q and good R. Chris starts off with an endowment of 6 units of Q and 10 units of R. Dana starts off with an endowment of 8 units of Q and 8 units of R. Suppose that the price of good R is pR=1 and the price of good Q is pQ=2. a )At these prices, does the market clear? Yes or no? Explain your answer. b) What relationship must hold between the consumption of each agent and the price of the two goods at the market clearing equilibrium? Write the equationConsider a public good setting with single-peaked preferences. There are n agents in the economy and that the set of possible choices of the economy is the set [0,1]. An allocation re [0, 1] results in utility -(-p)2, where pi € [0,1] is agent i's most preferred allocation ("peak"). Define the core when an allocation is blocked by an allocation y [0, 1] if more than half of agents finds y strictly preferred to x. (a) Find the core when n is odd. (b) Find the core when n is even.
- PPFs are usually bowed out because: a) all resources are not equally adaptable in the production of all goods b) all resources are equally adaptable in the production of all goods c) the more resources a society uses to produce one good, the fewer resources it has available to produce another good. d)all PPfs have a negative slopeAnalyze how pareto efficiency is achieved from consumption activities in an economySuppose country A has 5000 units of capital and 2000 units of labor while country B has 6000 units of capital and 3000 units of labor: A: Which country is capital abundant and which one is labor abundant? Explain! Now suppose the production one unit of good X requires 3 units of capital and 2 units of labor and the production of one unit of good Y requires 6 units of capital and 3 units of labor. B: Which good is the capital intensive good and which one is the labor intensive good? Explain!! C: Which country should specialize in and export good X and which country should specialize in and export good Y. Explain!!! D: Using appropriate graphs, demonstrate that trade is beneficial if two countries have identical technology but different preferences. Does a country specialize in producing the good where they have the strongest preference? Explain DO D Foe answers for A, B and C -…
- Suppose country A has 5000 units of capital and 2000 units of labor while country B has 6000 units of capital and 3000 units of labor: A: Which country is capital abundant and which one is labor abundant? Explain! Now suppose the production one unit of good X requires 3 units of capital and 2 units of labor and the production of one unit of good Y requires 6 units of capital and 3 units of labor. B: Which good is the capital intensive good and which one is the labor intensive good? Explain!! C: Which country should specialize in and export good X and which country should specialize in and export good Y. Explain!!! D: Using appropriate graphs, demonstrate that trade is beneficial if two countries have identical technology but different preferences. Does a country specialize in producing the good where they have the strongest preference? ExplainSuppose countries A and B produce and consume (assuming convex preferences) apples and bananas using only labour. Unit labour cost for apples in country A are 1 and 2 in country B. Unit labour cost for bananas are 2 in country A and 5 in country B. The labour force is the same in both countries, and given by 100 in each country. Which three of the following statements are true? A Country B has a comparative advantage in producing bananas. B Allowing for international trade, the production of 50 apples and 50 bananas can occur in a global market equilibrium feasible, but not in market equilibria under autarky. C Each country has an absolute advantage. D Allowing for international trade, the production of 50 apples and 50 bananas is feasible, but not under autarky. E Under autarky, the relative price for apples (price for apples/price for banans) equals 0.5 in country A and 0.4 in country B. F Country A will produce bananas, with or…Alice and Bob are both capable of producing goods X and Y. In one hour, Alice can produce one unit of each good. In the same amount of time, Bob can produce two units of each good. If Alice and Bob have access to the same amount of time, calculate the difference between the slope of Alice's PPF and the slope of Bob's PPF. (round to two decimal places if necessary)