EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 10, Problem 10.9P
a)
To determine
According to figure Edgeworth box is to be drawn with the help of total quantities of capital and labor.
b)
To determine
supposing the lower left corner of the box to be the origin for the isoquant map for good x then a few of the X isoquants is to be drawn.
c)
To determine
considering the upper right corner of the box to be the origin for the origin for the isoquant map for good Y then few Y isoquants in the Edgeworth box is to be drawn.
d)
To determine
Efficient points in the box is to mentioned and efficient conditions for given allocation of K and L is to be described.
e)
To determine
The
f)
To determine
By using the connection between box diagram and the production possibility frontier some cases are to be discussed.
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The production possibilities frontier curve illustrates that
a.
an economy's capacity to produce is unrelated to its population.
b.
if all the resources of an economy are being used efficiently, more of one good can be produced only if more of another good is produced.
c.
an economy will automatically move toward a point at which all of its resources are being used inefficiently.
d.
if all the resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.
Consider the figure attached which shows the combined production function of Anna and Bob.Suppose a scenario where the 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)
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? Explain
DO D
Foe answers for A, B and C -…
Chapter 10 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 10.2 - Prob. 1MQCh. 10.4 - Prob. 1MQCh. 10.4 - Prob. 2MQCh. 10.4 - Prob. 1.1MQCh. 10.5 - Prob. 1TTACh. 10.5 - Prob. 2TTACh. 10.7 - Prob. 1MQCh. 10.7 - Prob. 2MQCh. 10.7 - Prob. 3MQCh. 10.8 - Prob. 1TTA
Ch. 10.8 - Prob. 2TTACh. 10.8 - Prob. 1MQCh. 10.8 - Prob. 2MQCh. 10 - Prob. 1RQCh. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Prob. 7RQCh. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 10RQCh. 10 - Prob. 10.1PCh. 10 - Prob. 10.2PCh. 10 - Prob. 10.3PCh. 10 - Prob. 10.4PCh. 10 - Prob. 10.5PCh. 10 - Prob. 10.6PCh. 10 - Prob. 10.7PCh. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Prob. 10.10P
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- Consider the figure attached below which shows the combined production function of Anna and Bob. Assume a case where Anna works on the land owned by Bob. By referring to the diagram above, explain how does Anna ranks the possible allocations marked as X, Y, Z and A according to production functions and their curves and slopes ? Question is completearrow_forwardIn the above diagram above which of the following statement is TRUE? A) To move from production combination A to production combination B requires that we transfer resources from guns to butter. B) To move from production combination A to production combination B requires that we either increase the available resources or improve the available technology. C) To move from production combination A to production combination B requires that we expand gun production by reducing butter production. D) To move from production combination A to production combination B requires that we reduce the amount of resources that are either unemployed or underemployed. E) To move from production combination A to production combination B requires that we transfer resources from butter to guns.arrow_forwardQ2. Suppose that there are two countries (A and B) and two goods (a labor-intensive good X, textile, and a capital-intensive good Y, electronics). The two countries have identical demand for the two goods but different labor and capital endowments. Suppose (Px/Py)A < (Px/Py)B in autarky. Identify the capital-abundant country and the labor-abundant country, respectively. Use a PPF-indifference-curve graph to identify the autarky equilibrium for country B. In the same graph, show country B's gains from trade when the two countries trade at a level of Px/Py that is between the two countries' autarky price ratios. In the above graph, identify the trade triangle (including export and import quantities) for country B. What would be the effect of trade on country B's relative nominal wage rate, i.e., the ratio of nominal wage rate relative to nominal capital rental rate (w/r)? Illustrate your answer graphically. Your answer:arrow_forward
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