An economy consists of three workers: Larry, Moe, and Curly. Each works ten 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. Calculate how much of each service is produced under the following circumstances, which we label A, B, C, and D: All three spend a their time mowing lawns (A) All three spend all their time washing cars (B) All three spend half their time on each activity (C) Larry spends half his time on each activity, while Moe only washes cars and Curly only mows lawns (D) Sketch a production possibilities frontier for points A, B, C, and D and explain why the production possibilities frontier has the shape it does. Are any of the allocations calculated in part (a) inefficient? Explain.
An economy consists of three workers: Larry, Moe, and Curly. Each works ten 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. Calculate how much of each service is produced under the following circumstances, which we label A, B, C, and D: All three spend a their time mowing lawns (A) All three spend all their time washing cars (B) All three spend half their time on each activity (C) Larry spends half his time on each activity, while Moe only washes cars and Curly only mows lawns (D) Sketch a production possibilities frontier for points A, B, C, and D and explain why the production possibilities frontier has the shape it does. Are any of the allocations calculated in part (a) inefficient? Explain.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
- An economy consists of three workers: Larry, Moe, and Curly. Each works ten 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.
- Calculate how much of each service is produced under the following circumstances, which we label A, B, C, and D:
All three spend a their time mowing lawns (A)
All three spend all their time washing cars (B)
All three spend half their time on each activity (C)
Larry spends half his time on each activity, while Moe only washes cars and Curly only mows lawns (D)
- Sketch a production possibilities frontier for points A, B, C, and D and explain why the production possibilities frontier has the shape it does.
- Are any of the allocations calculated in part (a) inefficient? Explain.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education