1. Use the specific-factors model to answer question 1. that there are two industries, agriculture and...

 

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1. Use the specific-factors model to answer question 1. that there are two industries, agriculture and manufacturing. agricultural industry uses labor and land as inputs while the manufacturing industry uses labor and capital as inputs. The production function for each good is as follows : Agriculture Production Function Land Labor 20 20 12 20 2 22 20 3 30 20 36 20 40 20 6. 42 Manufacturing Production Function Capital 20 Labor 20 12 20 22 20 30 36 20 20 40 20 42 O12 3456 Assume that the economy has 6 workers. Assume that each workers. а. not partial industry can only employ whole workers, Calculate the possible combinations of agricultural output and manufacturing output and write in columns (3) and (4) of the table below. (1) (2) (3) (6) (4) Output Mfr. (5) (7) Labor Agric. Mfr Agric MPLA MPLM PPF Slope 1 4 6. production possibilities frontier with manufacturing output on the horizontal Show the b. Use the above information to sketch the axis and agricultural output the on the vertical axis. values of vertical intercepts coordinates of at least two other points of the PPF. horizontal and and the c. Calculate the marginal product of labor in both industries between each pair of adjacent points on the production function and complete columns (5) and (6) of the above table. Calculate the slope of the production function between each Complete column (7) d. pair of adjacent points. How much of each good will be Draw a price line on your PPF graph in part b showing Suppose that PM/Pa = 1.5. е. produced? this output combination. 1. Use the specific-factors model to answer question 1. that there are two industries, agriculture and manufacturing. agricultural industry uses labor and land as inputs while the manufacturing industry uses labor and capital as inputs. The production function for each good is as follows : Agriculture Production Function Land Labor 20 20 12 20 2 22 20 3 30 20 36 20 40 20 6. 42 Manufacturing Production Function Capital 20 Labor 20 12 20 22 20 30 36 20 20 40 20 42 O12 3456 Assume that the economy has 6 workers. Assume that each workers. а. not partial industry can only employ whole workers, Calculate the possible combinations of agricultural output and manufacturing output and write in columns (3) and (4) of the table below. (1) (2) (3) (6) (4) Output Mfr. (5) (7) Labor Agric. Mfr Agric MPLA MPLM PPF Slope 1 4 6. production possibilities frontier with manufacturing output on the horizontal Show the b. Use the above information to sketch the axis and agricultural output the on the vertical axis. values of vertical intercepts coordinates of at least two other points of the PPF. horizontal and and the c. Calculate the marginal product of labor in both industries between each pair of adjacent points on the production function and complete columns (5) and (6) of the above table. Calculate the slope of the production function between each Complete column (7) d. pair of adjacent points. How much of each good will be Draw a price line on your PPF graph in part b showing Suppose that PM/Pa = 1.5. е. produced? this output combination.

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1 a The number of workers 6 Possible combinations of workers ab 06 15 24 33 42 51 60 where ... View the full answer