Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. a. Draw Home's production possibility frontier. Label the curve PPF. (Clearly show the maximum amount of the two goods that can be produced on your graph) b. What is the opportunity cost of apples in terms of bananas? (Enter your response rounded to one decimal place.) c. In the absence of trade, what would the price of apples in terms of bananas be? There is now also another country, Foreign, with a labor force (L) of 800. Foreign's unit labor requirement in apple production is 5, while in banana
Q3. Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2.
a. Draw Home's
b. What is the
c. In the absence of trade, what would the price of apples in terms of bananas be?
There is now also another country, Foreign, with a labor force (L) of 800.
Foreign's unit labor requirement in apple production is 5, while in banana production it is 1.
d. Derive the equation for Foreign's production possibility frontier.
e. Graph Foreign’s production possibility frontier.
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