Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Question
Chapter 16, Problem 10E
To determine
Changes in the production contract curve due to changes in the nature of production function.
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Chapter 16 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
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- As may have been blatantly obvious to you all along, since Miranda is the only inhabitant of the island, all she's really doing is catching fish for herself and eating them. However, even a single agent economy such as this one has all of the features any economy would, such as supply and demand curves, and equilibrium prices and quantities. Miranda plays many roles in this economy, as all of the profit earned by Miranda the producer is transmitted to Miranda the shareholder, which represents additional income that Miranda the consumer can spend on fish in addition to the labor income earned by Miranda the worker. (a) Suppose Miranda earns both labor income and profit, so that pq = wl + π(p). Rewrite her utility maximization problem and find the new demand for fish qd(p) and leisure r(p). (b) Find the equilibrium price p* and quantity q* of fish. (c) Find the equilibrium hours of labor l* and labor r*.arrow_forwardConsider a Production Possibility Frontier that bows outward. Suppose the production of one good increases. As a result opportunity cost of producing this good will __________ because productive resources ___________________ in their suitability for producing different kinds of goods. A. increase; differ B. decrease; are the same C. increase; are the same D. decrease; differarrow_forwardBrazil Mexico Soya per unit of labor 0.05 0.02 Corn per unit of labor 1.25 1.40 At what relative “price” of soya to corn would Mexico receive all of the potential gains from trade with Brazil? If production in both countries occur under conditions of perfect competition, and if the wage rate is $2 per hour in Brazil and $5 per hour in Mexico, using your knowledge of microeconomic theory, how would you go about calculating the price of corn in both countries?arrow_forward
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