Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 10, Problem 3.2P
To determine
Output determination and
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please help mw with this question. Thank you
Question 2
Consider a country that produces two goods wheat (W) and cotton (C) with two factors of production: land (T) and labor (L). The technology for wheat and cotton are as follows. Each unit of wheat requires 10 units of labor and 1 unit of land. Each unit of cotton requires 30 units of labor and 1 unit of land. Denote the wage by w and the rent of land by r.
a. Suppose a country has 500 units of labor and 20 units of land. Determine the allocation of labor and land between the two goods algebraically and then show it diagrammatically. How much of wheat and cotton are produced in the economy?
b. Now suppose that the labor supply increases to 540 units. Determine the allocation of labor and land between the two goods algebraically and then show them diagrammatically. Verify the Rybczynski’s theorem.
c. Now Suppose Malaysia has 500 units of labor and 20 units of land, while Indonesia has 80 units of land and 8000 units of labor. Which…
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Principles of Economics (12th Edition)
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- In 2002, a meeting is hold in a state-owned farm with one million mu of arable land—B farm after the harvest: Production department section Li said: This year we planted 0.6 million Mu (a unit of area, 1 Mu=0.0667 hectares) wheat, and got 280 kilograms’ wheat per Mu. But after this year's harvest, a new difficulty arises that price of wheat is decreasing now. Usually, the farm will keep 10 million kilograms as seeds and 18 million kilograms for living, and sell the rest to the market. If the firm doesn't sell and keeps the wheat in a long term, the weight of the wheat will decline for the moisture loss from 14% to 13%, which means the farm will loss 1.4 million kilograms. The manager of the supply and marketing, Mr. Liu said: Last year, the price of wheat is 0.96 yuan per kilogram, but now is only 0.80 yuan per kilogram. This causes a big loss to our farm this year. Therefore, we can't sell now! The manager of grain, Mr. Lin said: We have to sell. We predict that the low wheat price…arrow_forwardIn 2002, a meeting is hold in a state-owned farm with one million mu of arable land—B farm after the harvest: Production department section Li said: This year we planted 0.6 million Mu (a unit of area, 1 Mu=0.0667 hectares) wheat, and got 280 kilograms’ wheat per Mu. But after this year's harvest, a new difficulty arises that price of wheat is decreasing now. Usually, the farm will keep 10 million kilograms as seeds and 18 million kilograms for living, and sell the rest to the market. If the firm doesn't sell and keeps the wheat in a long term, the weight of the wheat will decline for the moisture loss from 14% to 13%, which means the farm will loss 1.4 million kilograms. The manager of the supply and marketing, Mr. Liu said: Last year, the price of wheat is 0.96 yuan per kilogram, but now is only 0.80 yuan per kilogram. This causes a big loss to our farm this year. Therefore, we can't sell now! The manager of grain, Mr. Lin said: We have to sell. We predict that the low wheat price…arrow_forwardThe table given below reports the value of sales at each stage of production of an economics book.Table 5.1 The Production of an Economics Book Production Stage Sales Value Purchase of Timber $1.25 Processing of Timber into Paper $7.75 Printing $24.50 Retail Sales of Economics Book $38.00 Refer to Table 5.1. Compute the market price of an economics book. Group of answer choices $38 $7.75 $13.50 $71.50 $24.50arrow_forward
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