Daniel and Kevin are two hardworking builders for solo, independently-owned companies. They can produce Chairs and Tables. As a result, they each have PPFs (Possibilities Production Frontiers) that illustrate their production. Daniel's PPF is shown by the equation: Qc = 12 - 3Qt. Likewise, Kevin's PPF is shown by the equation: Qt = 12 - 3Qc. Since they trust each other and are honest in their terms, Daniel and Kevin trade with each other and only each other; they do not take their goods to markets, and they do not interact with outside sellers/buyers. Since they want to make sure that they provide for their families in the most fair way possible, they set up and agree upon a few terms of trade. The terms are as follows: FIRST, the terms of trade are 1 Chair in exchange for 1 Table. SECOND, each of them specializes according to their own comparative advantage. THIRD, since Kevin needs a few extra things, he CONSUMES 3 units of the goods that he produces. With that said, I have a few parts to my question I would appreciate if you could solve. Part A) Draw out/create two different graphs --one for Daniel and one for Kevin--the individual PPFs, and the individual CPFs (consumption possibilities frontiers. Also, please indicate the individual points of production and the individual points of consumption. There should be a total of 4 graphs for the builders (1 PPF for Daniel, 1 CPF for Daniel, 1 PPF for Kevin, and 1 CPF for Kevin. Please label the graphs clearly and make sure to indicate values for slopes, intercepts, points of production, and points of consumption. Please make sure all graphs are included and completed in their entirety. Part B) Please explain how to find the individual points of PRODUCTION and how they were calculated and labeled on the graph(s). Part C) Please explain how to find the individual points of CONSUMPTION and how they were calculated and labeled on the graph(s). (Hint: think about opportunity costs, calculating income, etc.)

Daniel and Kevin are two hardworking builders for solo, independently-owned companies. They can produce Chairs and Tables. As a result, they each have PPFs (Possibilities Production Frontiers) that illustrate their production. Daniel's PPF is shown by the equation: Qc = 12 - 3Qt. Likewise, Kevin's PPF is shown by the equation: Qt = 12 - 3Qc. Since they trust each other and are honest in their terms, Daniel and Kevin trade with each other and only each other; they do not take their goods to markets, and they do not interact with outside sellers/buyers. Since they want to make sure that they provide for their families in the most fair way possible, they set up and agree upon a few terms of trade. The terms are as follows: FIRST, the terms of trade are 1 Chair in exchange for 1 Table. SECOND, each of them specializes according to their own comparative advantage. THIRD, since Kevin needs a few extra things, he CONSUMES 3 units of the goods that he produces. With that said, I have a few parts to my question I would appreciate if you could solve. Part A) Draw out/create two different graphs --one for Daniel and one for Kevin--the individual PPFs, and the individual CPFs (consumption possibilities frontiers. Also, please indicate the individual points of production and the individual points of consumption. There should be a total of 4 graphs for the builders (1 PPF for Daniel, 1 CPF for Daniel, 1 PPF for Kevin, and 1 CPF for Kevin. Please label the graphs clearly and make sure to indicate values for slopes, intercepts, points of production, and points of consumption. Please make sure all graphs are included and completed in their entirety. Part B) Please explain how to find the individual points of PRODUCTION and how they were calculated and labeled on the graph(s). Part C) Please explain how to find the individual points of CONSUMPTION and how they were calculated and labeled on the graph(s). (Hint: think about opportunity costs, calculating income, etc.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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With that said, I have a few parts to my question I would appreciate if you could solve.

Part A) Draw out/create two different graphs --one for Daniel and one for Kevin--the individual PPFs, and the individual CPFs (consumption possibilities frontiers. Also, please indicate the individual points of production and the individual points of consumption. There should be a total of 4 graphs for the builders (1 PPF for Daniel, 1 CPF for Daniel, 1 PPF for Kevin, and 1 CPF for Kevin. Please label the graphs clearly and make sure to indicate values for slopes, intercepts, points of production, and points of consumption. Please make sure all graphs are included and completed in their entirety.

Part B) Please explain how to find the individual points of PRODUCTION and how they were calculated and labeled on the graph(s).

Part C) Please explain how to find the individual points of CONSUMPTION and how they were calculated and labeled on the graph(s). (Hint: think about opportunity costs, calculating income, etc.)

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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