Question: Consider a closed economy in the basic model framework. The economy can only produce mangoes and pineapples. Determine whether each of the following statements is
Consider a closed economy in the basic model framework. The economy can only produce mangoes and pineapples. Determine whether each of the following statements is true, false, or indeterminate.
a) When the nominal price of mangoes goes down, consumers demand more mangoes.
b)For this model economy, consumers' willingness to pay is given by the absolute value of the slope of the PPF at a point.
c) In equilibrium, the slope of the PPF at a production point must equal the slope of the CIC at the consumption point.
d) If the equilibrium outcome is such that the quantity of pineapples produced is greater than the quantity of mangoes, then workers in the pineapple-sector will be receive a higher wage than workers in the mango-sector.
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