Sketch the relative price of food as a function of its output in part (c). f. If
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Sketch the relative price of food as a function of its output in part (c).
f. If consumers insist on trading 4 units of food for 5 units of cloth, what is the relative price of food? Why? g. Explain why production is exactly the same at a price ratio of P/Pc = 1.1 as at Pr/Pc = 1.9. h. Suppose that capital is also required for producing food and clothing and that capital require- ments per unit of food and per unit of clothing are 0.8 and 0.9, respectively. There are 100 units of capital available. What is the production possibility curve in this case? Answer part
(e) for this case.
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Related Book For
Microeconomic Theory Basic Principles And Extensions
ISBN: 9780324585377
10th Edition
Authors: Walter Nicholson, Christopher M. Snyder
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