17.3 In the country of Ruritania there are two regions, A and B. Two goods (Xand Y) are produced in both regions. Production functions for region A are given by YA = Y Lx and Lyare the quantity of labor devoted to Xand Yproduction, respectively. Total labor available in region A is 100 units. That is, Lx+ LY= 100. Using a similar notation for region B, production functions are given by YB= jy There are also 100 units of labor available in region B:

Lx+ LY= 100.

a. Calculate the production possibility curves for regions A and B.

b. What condition must hold if production in Ruritania is to be allocated efficiently be tween regions A and B (assuming labor cannot move from one region to the other)?

c. Calculate the production possibility curve for Ruritania (again assuming labor is immo bile between regions). How much total Fcan Ruritania produce if total Xoutput is 12?

Hint: A graphical analysis may be of some help here.