The figure below shows Angela and Bruno's feasible frontier, Angela's biological survival constraint, and her reservation indifference curve. The total amount of grain produced is 9 bushels if Angela works for 8 hours, and 10 bushels if she works for 11 hours. Angela's biological survival constraint Angela's reservation indifference curve 12 9. Feasible frontier Angela and Bruno combined 13 16 24 Angela's hours of free time 6. Technically feasible Economically feasible (joint surplun) 4.5 13 16 24 Angela's hours of free time From this information, we can conclude that: O Under Bruno's best voluntary exchange outcome, he can claim an economic rent of 5 out of the total surplus of 6. O Bruno can increase his share by 2 bushels if he could coerce Angela to work 11 hours, compared to under the voluntary exchange outcome. O Under voluntary exchange, Angela will choose not to work if she is offered 2 bushels of grain for 16 hours of free time. O Bruno can devise a take-it-or-leave-it offer under voluntary exchange such that he is just as well off as the best outcome under coercion. What Bruno gets Bushels of grain 2.

The figure below shows Angela and Bruno's feasible frontier, Angela's biological survival constraint, and her reservation indifference curve. The total amount of grain produced is 9 bushels if Angela works for 8 hours, and 10 bushels if she works for 11 hours. Angela's biological survival constraint Angela's reservation indifference curve 12 9. Feasible frontier Angela and Bruno combined 13 16 24 Angela's hours of free time 6. Technically feasible Economically feasible (joint surplun) 4.5 13 16 24 Angela's hours of free time From this information, we can conclude that: O Under Bruno's best voluntary exchange outcome, he can claim an economic rent of 5 out of the total surplus of 6. O Bruno can increase his share by 2 bushels if he could coerce Angela to work 11 hours, compared to under the voluntary exchange outcome. O Under voluntary exchange, Angela will choose not to work if she is offered 2 bushels of grain for 16 hours of free time. O Bruno can devise a take-it-or-leave-it offer under voluntary exchange such that he is just as well off as the best outcome under coercion. What Bruno gets Bushels of grain 2.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 3CQQ

See similar textbooks

Similar questions

A farmer can feed any combination of animals within the following range: Pigs Cows 84 12 75 15 Given the option available to him, what is the opportunity cost to the farmer of rearing one cow? Figure below presents a production-possibility frontier for food and clothing. What is the opportunity cost of increasing food production from 0 to 2 million units, from 2 million to 4 million units, and from 4 million to 6 million units? What is happening to the opportunity cost of increasing food production from 0 to 6 million units? Explain how the shape of the production-possibility frontier implies increasing costs for the production of clothing.
Before Frank and Ruby engage in trade, each ofthema. consumes at a point inside his or her productionpossibilities frontier.b. consumes at a point on his or her productionpossibilities frontier.c. consumes at a point outside his or her productionpossibilities frontier.d. consumes the same amounts of meat andpotatoes as the other
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 zero.
In business analysis, the production possibility frontier (PPF) is a curve illustrating the varying amounts of two products that can be produced when both depend on the same finite endowment of resources by one country. The PPF demonstrates that the production of one commodity may increase only if the production of the other commodity decreases in economy. By using the Production Possibilities Frontier Curve (PPF), explain and illustrates (in 1 graph) the concepts of Inefficient allocation of resources Efficient allocation of resources Unattainable point. Scarcity of resources.
Need help with this homework thinking question (about opportunity costs) Sigmund Freud, in his 1930 essay Civilization and Its Discontents, argues that thesublimation of sexual desire leads to the mental energy required for advances in civiliza-tion: science, art, politics, etc. He writes,“Sublimation of instinct [such as sexual instinct] is an especially conspicu-ous feature of cultural development; it is what makes it possible for higherpsychical activities, scientific, artistic, or ideological, to play such an impor-tant part in civilized life... it is impossible to overlook the extent to whichcivilization is built up upon a renunciation of instinct...” How would an economist phrase Freud’s argument, in terms of opportunity costs? Might this explain the development of monogamous marriage as an institution?
An economy produces two goods ,X and Y .lt uses two means of production, labour and capital. A unit of labour can produce either 1unit of X or 4units of Y (or linear combination of the two).A unit of capital can produce either 4units of X or 1unit of Y (or linear combination of the two)there are 100units of each means of production. (i) Draw the production possibility frontier of the economy when the two goods can only be produced by a mixture of both factors. (ii)What will be the opportunity cost of X if the economy produces 50units of X ? (iii) Given that the production technology is linear ,will the opportunity cost of X remain unchanged when we produce 90units of X ? (iv)Briefly explain the difference between the PPC with a constant opportunity cost and the PPC with an increasing opportunity cost as more output of one good is produced. Use a well labeled diagram to explain your answer?
How prices allocate resources Suppose that there are three beachfront parcels of land available for sale in Astoria and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $745,000. The following table states each person's willingness and ability to purchase a parcel. Person Willingness and Ability to Purchase (Dollars) Andrew 900,000 Beth 810,000 Darnell 770,000 Eleanor 720,000 Jacques 690,000 Kyoko 680,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. Andrew Beth Darnell Eleanor Jacques Kyoko Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum…
. Diego and Darnell are roommates. They spend mostof their time studying (of course), but they leavesome time for their favorite activities: making pizzaand brewing root beer. Diego takes 4 hours to brewa gallon of root beer and 2 hours to make a pizza.Darnell takes 6 hours to brew a gallon of root beerand 4 hours to make a pizza.a. What is each roommate’s opportunity cost ofmaking a pizza? Who has the absolute advantagein making pizza? Who has the comparativeadvantage in making pizza?b. If Diego and Darnell trade foods with each other,who will trade away pizza in exchange for rootbeer?c. The price of pizza can be expressed in terms ofgallons of root beer. What is the highest price atwhich pizza can be traded that would make bothroommates better off? What is the lowest price?Explain.
Suppose a production possibilities frontier can be expressed as 9X2+y2=81. what is the opportunity cost of going from 1 unit of X to 2 units of X (in terms of units of Y)? a)√72-√45 b)1 c) 45 d) √45
Review the numbers for Canada and Venezuelafrom Table 33.12 which describes how many barrelsof oil and tons of lumber the workers can produce. Usethese numbers to answer the rest of this question.a. Draw a production possibilities frontier for eachcountry. Assume there are 100 workers in eachcountry. Canadians and Venezuelans desire bothoil and lumber. Canadians want at least 2,000tons of lumber. Mark a point on their productionpossibilities where they can get at least 3,000tons.b. Assume that the Canadians specializecompletely because they figured out they havea comparative advantage in lumber. They arewilling to give up 1,000 tons of lumber. Howmuch oil should they ask for in return for thislumber to be as well off as they were with notrade? How much should they ask for if theywant to gain from trading with Venezuela? Note:We can think of this “ask” as the relative price ortrade price of lumber.c. Is the Canadian “ask” you identified in (b) alsobeneficial for Venezuelans? Use the…
Suppose that the opportunity cost of producing 10 chickens is always 8 turkeys. Giventhis, the relevant production possibility frontier must be:
Suppose the production possibility frontier for cheese-burgers (C) and milkshakes (M) is given by C + 2M = 600 a. Show working and graph this frontier. b. Assuming that people prefer to eat two cheeseburgers with every milkshake, how much of each product will be produced? show working and indicate this point on the graph. c. Given that this fast-food economy is operating efficiently, what price ratio (PC/PM) must prevail? show working