4. An economy consists of three workers: Larry, Moe,and Curly. Each works 10 hours a day and can produce two services: mowing lawns and washing cars.In an hour, Larry can either mow one lawn or washone car; Moe can either mow one lawn or wash twocars; and Curly can either mow two lawns or washone car.a. Calculate how much of each service is producedunder the following circumstances, which welabel A, B, C, and D:r All three spend all their time mowing lawns. (A)r All three spend all their time washing cars. (B)r All three spend half their time on eachactivity. (C)r Larry spends half his time on each activity, whileMoe only washes cars and Curly only mowslawns. (D)b. Graph the production possibilities frontier for thiseconomy. Using your answers to part a, identifypoints A, B, C, and D on your graph.c. Explain why the production possibilities frontierhas the shape it does.d. Are any of the allocations calculated inpart a inefficient? Explain.
4. An economy consists of three workers: Larry, Moe,
and Curly. Each works 10 hours a day and can produce two services: mowing lawns and washing cars.
In an hour, Larry can either mow one lawn or wash
one car; Moe can either mow one lawn or wash two
cars; and Curly can either mow two lawns or wash
one car.
a. Calculate how much of each service is produced
under the following circumstances, which we
label A, B, C, and D:
r All three spend all their time mowing lawns. (A)
r All three spend all their time washing cars. (B)
r All three spend half their time on each
activity. (C)
r Larry spends half his time on each activity, while
Moe only washes cars and Curly only mows
lawns. (D)
b. Graph the
economy. Using your answers to part a, identify
points A, B, C, and D on your graph.
c. Explain why the production possibilities frontier
has the shape it does.
d. Are any of the allocations calculated in
part a inefficient? Explain.
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