Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![(b)
(c)
Explain how you found the individual points of production.
Explain how you found the individual points of consumption.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fca16b239-472b-4e9c-812b-bccda92e148b%2Fd348ced8-dbde-467a-a9cb-ddb3af21ffe6%2F7c8xes8_processed.png&w=3840&q=75)
Transcribed Image Text:(b)
(c)
Explain how you found the individual points of production.
Explain how you found the individual points of consumption.
![1. PPF and CPF
Josel's PPF is defined by Qosel
F
Josel and Kayla can produce food and luxury goods.
Kayla
12-3Qosel and Kayla's PPF is defined by Qa
12 - 3Q Kayla Suppose that Josel and Kayla trade with each other (i.e., no outside
merchants). Kayla and Josel agree to trade under the following conditions: 1) the terms
of trade are 1 unit of food in exchange for 1 unit of luxury goods; 2) each specializes
according to his/her comparative advantage; and 3) Kayla consumes 3 units of the
good she produces.
(a)
=
Sketch on two different graphs (one for Josel and one for Kayla) the
individual PPFs, the individual CPFs, and indicate the individual points of pro-
duction and the individual points of consumption. Clearly label your graphs (i.e.,
indicate values for slopes, intercepts, points of production, and points of consump-
tion).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fca16b239-472b-4e9c-812b-bccda92e148b%2Fd348ced8-dbde-467a-a9cb-ddb3af21ffe6%2F1dlib6f_processed.png&w=3840&q=75)
Transcribed Image Text:1. PPF and CPF
Josel's PPF is defined by Qosel
F
Josel and Kayla can produce food and luxury goods.
Kayla
12-3Qosel and Kayla's PPF is defined by Qa
12 - 3Q Kayla Suppose that Josel and Kayla trade with each other (i.e., no outside
merchants). Kayla and Josel agree to trade under the following conditions: 1) the terms
of trade are 1 unit of food in exchange for 1 unit of luxury goods; 2) each specializes
according to his/her comparative advantage; and 3) Kayla consumes 3 units of the
good she produces.
(a)
=
Sketch on two different graphs (one for Josel and one for Kayla) the
individual PPFs, the individual CPFs, and indicate the individual points of pro-
duction and the individual points of consumption. Clearly label your graphs (i.e.,
indicate values for slopes, intercepts, points of production, and points of consump-
tion).
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