Assume there is a two person economy, where they have only coffee and nuts. Susan can pick 4 pounds of coffee in an hour or gather 2 pounds of nuts. Tom can pick 2 pounds of coffee in an hour or gather 4 pounds of nuts. Each works 6 hours per day. a. What is the maximum pounds of coffee that the two can pick each day? b. What is the maximum pounds of nuts that the two can gather each day? c. Draw their individual and group production possibility curves (assuming constant marginal returns). d. What is one combination that would be considered an inefficient level of production in this economy. e. What is one combination that would be considered an unattainable level of production in this economy.

Assume there is a two person economy, where they have only coffee and nuts. Susan can pick 4 pounds of coffee in an hour or gather 2 pounds of nuts. Tom can pick 2 pounds of coffee in an hour or gather 4 pounds of nuts. Each works 6 hours per day. a. What is the maximum pounds of coffee that the two can pick each day? b. What is the maximum pounds of nuts that the two can gather each day? c. Draw their individual and group production possibility curves (assuming constant marginal returns). d. What is one combination that would be considered an inefficient level of production in this economy. e. What is one combination that would be considered an unattainable level of production in this economy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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