2. An economy can produce good 1 using labor and capital and good 2 using labor and...

Question:

2. An economy can produce good 1 using labor and capital and good 2 using labor and land. The total supply of labor is 100 units. Given the supply of capital, the outputs of the two goods depend on labor input as follows:

MyEconLab Labor Input to Good 1 Output of Good 1 Labor Input to Good 2 Output of Good 2 0 0.0 0 0.0 10 25.1 10 39.8 20 38.1 20 52.5 30 48.6 30 61.8 40 57.7 40 69.3 50 66.0 50 75.8 60 73.6 60 81.5 70 80.7 70 86.7 80 87.4 80 91.4 90 93.9 90 95.9 100 100 100 100

a. Graph the production functions for good 1 and good 2.

b. Graph the production possibility frontier. Why is it curved?

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Related Book For  book-img-for-question

International Finance Theory And Policy

ISBN: 9781292019550

10th Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz

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