2.Kayla has 10 hours to pickberries, to catch trout, and to invest in a net. In the absence of investment, it takesKayla 2 hours to pick 1 basket of berries and 2 hours to catch 1 trout. Kayla has theoption to invest by devoting 2 hours into weaving a net. If she weaves a net for 2 hours,then it takes her 2 hours to pick 1 basket of berries and 1 hour to catch 1 trout.Suppose that the government imposes a quantity restriction of 4 baskets of berries.That is, Kayla is allowed to pick anything between 0 and 4 basket of berries, but notmore than that. There is no quantity restriction on trout and Kayla has the option toinvest in a net. Outside merchants buy and sell trout and baskets of berries at pricesPT = 2 and PBB 1, respectively.=Sketch Kayla's PPF and CPF, and indicate the point of production. Clearly label yourgraphs (i.e., indicate values for slopes, intercepts, and point of production).

Production and consumption constitute two distinct economic activities that are inextricably…

Answered: Kayla has 10 hours to pick berries, to…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A and B consume only two goods, cider (C) and dumplings (D). A has an initial endowment of 10 bottles of C and 30 of D. Bob has an initial endowment of 50 bottles of cider and 50 dumplings. Alice’s utility function is uA(CA,DA) = 9ln(CA) + 10ln(DA), where CA and DA represent consumption of C and D, respectively. B’s utility function is uB(CB,DB) = CBXDB, where CB and DB denote B's consumption of C and D. a) Find the competitive equilibrium, i.e. the price ratio, of this exchange economy and the resulting equilibrium allocation. b) Find the expression of the contract curve for this economy and use your answer to check that the equilibrium allocation you found in (b) is indeed Pareto optimal.
Suppose that Verania and Josimar are roommates that need to complete some household chores. Vacuuming and washing dishes need to be done. They know from the last time they did these chores that it takes Verania 2 hours to vacuum and 1 hour to wash dishes. It takes Josimar 3 hours to vacuum and 2 hours to wash dishes. Josimar says it does not matter which task each of them performs because Verania is faster at both tasks. Josimar’s reasoning a. is wrong. Because Verania has a comparative advantage in washing dishes, she should wash dishes, and Josimar should vacuum. b. is correct. Because Verania is faster at both tasks, there is no benefit in each volunteer specializing in one task or the other. c. is wrong. Because Verania has an absolute advantage in both tasks, she should perform both tasks herself. d. is wrong. Because Josimar has a comparative advantage in washing dishes, he should wash dishes, and Verania should vacuum.
Ab 10 Economics x axis is coffee(cups)
Sean and Yvette are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of barley and alfalfa each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of the land and alfalfa on the rest. Barley Alfalfa (Bushels per acre) (Bushels per acre) Sean 40 8 Yvette 28 7 On the following graph, use the blue line (circle symbol) to plot Sean's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Yvette's PPF.
7
If a family spends its entire budget in a given time frame, the family can afford either 95 cans of vegetables or 40 frozen dinners. Assuming the family spends its entire budget on just these two goods, what is the opportunity cost of a can of vegetables in the time frame?
Solve the attachment.
Allison has a golden goose that will lay an egg every year until forever. The first egg will be out next year, and each egg is worth $500. Allison's friend, Eric, offers a price to buy the golden goose from Allison today. The interest rate is 10%. From the cost-benefit analysis, under which of the following offers would Allison be willing to sell the goose to Eric? O A $4,500 B. $5.500 C. Allison would want to sell it to Eric with both $4,500 and $5.500. D. Allison wouldn't want to sell it anyway since the eggs would be laid out forever.
Note: Dashed drop lines will automatically extend to both axes. OFFEE (Millions of pounds) 32 28 COFFEE (Millions of pounds). 24 20 16 0 32 28 24 20 16 0 PPF 4 12 PPF 0 The following graph shows the same PPF for Sylvania as before, as well as its initial consumption at point A. As you did for Candonia, place a black point (plus symbol) on the following graph to indicate Sylvania's consumption after trade. (?) 4 O True 8 O False Candonia 4 12 20 16 GRAIN (Millions of pounds) 24 Sylvania 12 20 16 GRAIN (Millions of pounds) 28 24 32 28 Consumption After Trade 32 (? + Consumption After Trade True or False: Without engaging in international trade, Candonia and Sylvania would have been able to consume at the after-trade consumption bundles. (Hint: Base this question on the answers you previously entered on this page.)
(From last year’s final exam) Using an Edgeworth box, draw the following scenario. Amanda and Genevieve are in a 2-person closed economy where they only consume 2 goods: cheese and oranges. Amanda initially has 10 circles of cheese and 2 oranges and Genevieve initially has 12 oranges and 1 circle of cheese. Genevieve is tired of oranges and would like more cheese. Likewise, Amanda has eaten too much cheese in the past and would prefer more oranges. Assume that they engage in a series of trades and in the end settle on the following deal: Amanda gives Genevieve 4 circles of cheese in exchange for 6 oranges. Make sure to indicate on your graph: i. all of the axes, ii. indifference curves at the initial endowment (assume usual, well-behaved, convex indifference curves), iii. and indifference curves at the final bundle that emerged as an equilibrium through trade.
3 Consider a pure exchange economy with 2 consumers and 2 goods. Consumer ? owns 8 units of good 1 and 1 unit of good 2, and his preference is represented by the following utility function: uA(x1, x2) = x1*x2. Consumer ? owns 2 units of good 1 and 4 units of good 2, and his preference is represented by the following utility function: uB(x1,x2)=x1+x2. Assume that the two consumers are allowed and able to trade with each other, and that good 1 is the numeraire. In this case, both consumers act as price-takers. Price takers: a market participant that is not able to dictate the prices in a market. Therefore, a price taker must accept the prevailing market price. Please find the competitive equilibrium of this pure exchange economy.
lives on an island where she produces two goods, apples (x) and bananas (y), according to the production possibility frontier 200 = x2 + y², and she consumes all the goods herself. Her utility function is U(x, y) = xy. Find her utility maximizing x and y as 1S well as the value of 2 (Lagrange multiplier).

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