Question: Consider the production contract curve in the graph on the right which illustrates efficient allocations of labor and capital to the production of two goods,

Consider the production contract curve in the graph on the right which illustrates efficient allocations of labor and capital to the production of two goods, guns and roses.

a. Use the information in the production contract curve to draw the production possibilities frontier for guns and roses. Put roses on the horizontal axis and guns on the vertical axis. Assume that when all resources are devoted to gun production, 100 guns can be produced; when all resources are devoted to rose production, 3,000 roses can be grown.
b. Locate point X in the Edgeworth box. Draw a corresponding point X on your production possibilities frontier. Be as accurate as possible in locating this point.

- Labor inputs for roses QG-20 QR= 750 QR = 2,000 QR = 2,800 Labor inputs for guns

Step by Step Solution

★★★★★

3.44 Rating (173 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a and b Gun... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

720-B-E-D-S (1773).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

In the Edgeworth production box diagram, what conditions must hold for an allocation to be on the production contract curve? Why is a competitive equilibrium on the contract curve?

In the context of our analysis of the Edgeworth production box, suppose that a new invention changes a constant-returns-to-scale food production process into one that exhibits sharply increasing...

One of the conditions we identified as important to the first welfare theorem is that there are no externalities. One of the most important externalities in the real world is pollution from...

Consider the production contract curve in the graph on the right that illustrates efficient allocations of labor and capital to the production of two goods, guns and roses. a. Use the information in...

19. Consider the production contract curve in the graph below which illustrates efficient allocations of labor and capital to the production of two goods, guns and roses. a. Use the information in...

He lp m e pl e a se . Question,, estion: Ms. Matilda Bracken is a Certified Financial Planner (CFP) with many years of successful experien... Ms. Matilda Bracken is a Certified Financial Planner...

Scenario 13-8 Figure 7-4 Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02...

Solve.. Figure E.11.1 Banand Labor. banana 20 60 80 Capital 20 60 80 Capital Apple Labor, apple c) Indicate all points in the graph that are both Pareto improvements as compared to a, and are Pareto...

Suppose that a random sample of size 100 is to be drawn from a population with standard deviation 10. a. What is the probability that the sample mean will be within 20 of the value of ? b. For this...

Identify, explain, and illustrate the Implicit Demand Function.

38. LO.5 The board of directors of White Pearl, Inc., a private foundation, consists of Charlyne, Beth, and Carlos. They vote unanimously to provide a $325,000 grant to Marcus, their business...

12.3* The data file oil.dat contains 88 annual observations on the price of oil (in 196? constant dollars) for the period 1883-1970. (a) Plot the data. Do the data look stationary or nonstationary?...

1. A profit-maximizing firm picks the quantity of output at which ______ equals ______. 2. Arrows up or down: At a firms current level of output, marginal revenue exceeds the marginal cost. The firm...

Question 78 of 83\ Using the same information from before, please calculate the WACC of Correct Inc. assuming a risk free rate of 2.5% , a company Beta of 1.2 and a market risk premium of 6% .\ 9.7%...

What is a way to validate transactions and achieve a distributed consensus? Blockchain distributed, computing proof of work or proof of Stake

Use your ti calculator to write down commands for b A hypotheses test, some information from one sample, and a standard error from a randomization distribution are provided. avalgib noming s...