Home has 1200 units of labor available. There can produce two goods which watermelon and kiwi. The unit labor requirement in watermelon production is 3, while in kiwi production it is 2.  a) When all the labor only produce watermelon, how many units of watermelon can be produce? b) When all the labor only produce kiwi, how many units of kiwi can be produce? c) What is the opportunity cost of watermelon in terms of kiwi? d) In the absence of trade, what would be the price of watermelon in terms of kiwi? Why?

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Welfare Analysis

Welfare analysis of the society is related to welfare economics. From the economic point of view former welfare economics refers to that subject which uses the techniques of microeconomics to analyse and evaluate the welfare at the economic or aggregate level.