1.Show how the diagram changes if there is an improvement in the technology of food production. Hint: this means that for a given number of hours’ work, Angela can produce more. 2-Given perfect competition show, on a diagram that profit maximisation implies marginal revenue = marginal cost = price. Briefly explain how and why this outcome differs from the equilibrium with the monopolist. 3-Show diagrammatically, and briefly discuss the contrast between outcomes in which a) Angela is Bruno’s slave and has no choice about how much to work; b) Angela has a reservation option and she can choose whether, and how much, to work, and Bruno makes a take-it-or-leave it offer of a fixed amount of rent (in terms of grain). Your answer should focus on i) differences in terms of Angela’s hours worked; ii) Pareto-efficiency vs fairness; iii) who gains from trade.
1.Show how the diagram changes if there is an improvement in the technology of food production. Hint: this means that for a given number of hours’ work, Angela can produce more.
2-Given
3-Show diagrammatically, and briefly discuss the contrast between outcomes in which a) Angela is Bruno’s slave and has no choice about how much to work; b) Angela has a reservation option and she can choose whether, and how much, to work, and Bruno makes a take-it-or-leave it offer of a fixed amount of rent (in terms of grain). Your answer should focus on i) differences in terms of Angela’s hours worked; ii) Pareto-efficiency vs fairness; iii) who
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