2. Suppose Robinson found a ladder that helps Robinson's to pick more coconut in the beach. i.e., Robinson harvests more coconut than before given the same unit of time. Graph the change of competitive equilibrium and determine the effects on output. consumption. employment, and the real wage. Reference to income and substitution effects if necessary. (10 marks)

Suppose Robinson harvests more coconut than before given the same unit of time. i.e., NIPN goes up. Therefore, PPF rotates up at the time endowment point in the figure. MPN = w at the equilibrium. so w goes up. When w goes up. use income and substitution effect to identify the change of c and 1.