7. 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: B = 12L, -L 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 beconsidered. 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?

7. 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: B = 12L, -L 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 beconsidered. 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?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter1: Welcome To Economics!

Section: Chapter Questions

Problem 7SCQ: What is an example of a problem in the world today, not mentioned in the chapter, that has an...

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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: B, = 12L, -L².. Bananas also grow in the wilderness by: B= 2Lw. 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). Home is as described in problem 5. There is now also another country, Foreign, with a labor force of 800. Foreign’s unit labor requirement in apple production is 5, while in bananas production it is 1. a) When all the labor in Foreign country only produce apples, how many units of apples can be produce? b) When all the labor in Foreign country only produce bananas, how many units of bananas can be produce?
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Suppose a nation ha a total of 24 units of labor, which can be use to produce either guns or butter. One gun takes 6 units of labor to produce and 1 butter takes 2 units of labor to produce. What is the maximum quantitiy of guns that can be produced?
Elliot and Jordy find themselves on a deserted island. The only two activities available are fishing and finding pineapples. In a full day, Elliot can catch 6 fish or find 12 pineapples or some linear combination of the two; in the same time, Jordy can catch 4 fish or find 10 pineapples or some linear combination of the two. What are each individual’s marginal costs of fishing and finding pineapples? (must provide the correct answer for full credit, no additional work is necessary) Who has an absolute advantage in fish production? Who has an absolute advantage in finding pineapples? Briefly explain your reasoning. Who has a comparative advantage in fish production? Who has a comparative advantage in finding pineapples? Briefly explain your reasoning.
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] Alex and Mitch are two farmers who grow vegetables on common land. Each farmer gets a benefit from the seeds that he plants, but the overall size and quality of the individual vegetables decreases as the number of seeds planted increases (since each vegetable has less room to grow and gets a smaller share of nutrients from the soil). If SA represents the total number of seeds planted by Alex and SM is the total number planted by Mitch, then the total benefit to Alex will be as follows: SA (90-SA-SM), or 90SA SA2-SASM. The marginal benefit to Alex from planting additional seeds is, therefore, equal to 90 - 2SA - SM- Assuming the marginal cost of planting is zero, the best-response function that gives the optimal number of seeds Alex should plant, as a function of the number of seeds Mitch chooses to plant, is represented by • Use the blue line (circle symbol) to plot Alex's best-response function (BRF) on the following graph, with the total number of seeds he plants on the vertical…