Consider the production possibility frontier for a simple two-good (closed) economy. Quantities of good x produced...
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Consider the production possibility frontier for a simple two-good (closed) economy. Quantities of good x produced are plotted on the horizontal axis. Quantities of good y produced are plotted on the vertical axis. Suppose that the production of both x and y depends only on labor input and that the production functions for these goods are: x = f(lx) = lx and y = f(ly) = ly. Total labor supply is limited by: lx + ly = 100. The rate of product transformation (RPT) between the two goods, at x = 50 and y = 50, is equal to [RPT]. Please calculate RTP. Consider the production possibility frontier for a simple two-good (closed) economy. Quantities of good x produced are plotted on the horizontal axis. Quantities of good y produced are plotted on the vertical axis. Suppose that the production of both x and y depends only on labor input and that the production functions for these goods are: x = f(lx) = lx and y = f(ly) = ly. Total labor supply is limited by: lx + ly = 100. The rate of product transformation (RPT) between the two goods, at x = 50 and y = 50, is equal to [RPT]. Please calculate RTP.
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RTP 2 This is because when x 50 and y 50 we have lx ly 50 So the RPT is 2 To ca... View the full answer
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