6. An isolated village surrounded by wilderness contains a cultivated banana grove. Bananas (b) are the only consumption good; the number of villagers working in the grove is Lg. The grove produces bananas by: B₂ = 12L -L²g. Bananas also grow in the wilderness by: B= 2L. The village has 12 identical workers; none of them desires leisure and no other resources or products need be considered. (a) As a benevolent dictator, how would you divide the 12 laborers between grove and wilderness to maximize banana output? (b) Compare the results if the grove were instead "un-owned" property, so that any villager can enter and pick what he pleases

6. An isolated village surrounded by wilderness contains a cultivated banana grove. Bananas (b) are the only consumption good; the number of villagers working in the grove is Lg. The grove produces bananas by: B₂ = 12L -L²g. Bananas also grow in the wilderness by: B= 2L. The village has 12 identical workers; none of them desires leisure and no other resources or products need be considered. (a) As a benevolent dictator, how would you divide the 12 laborers between grove and wilderness to maximize banana output? (b) Compare the results if the grove were instead "un-owned" property, so that any villager can enter and pick what he pleases

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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