Question
1.1(each part of this question is worth 5 marks) The table below describes the productivities of Esther and Rajan (E&R) in market work and home
1.1(each part of this question is worth 5 marks) The table below describes the productivities of Esther and Rajan (E&R) in market work and home production.
Market production /hour: Esther: $10, Rajan: $6
Home production/hour: Esther: $8, Rajan: $10
The unit price of market goods is $1. Each person has 8 hours to work each day.
Another couple, Sylvan and Alex, have the same productivities: Sylvan is identical to Rajan, while Alex and Esther are identical.
Esther and Rajan both engage in market work. Sylvan works full time at home, so only Alex works in the market.
a)Given this information, which couple has the higher opportunity cost of home produced goods? Explain how you determined this. You can add a diagram if that helps, but you are not required to include one.
b)Can you determine which couple has the higher utility? Explain why or why not.
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