Question
A country produces two goods: Food and cloth. Given the information below, please answers questions a to c: - 8 machines (units of capital) are
A country produces two goods: Food and cloth. Given the information below, please answers questions a to c:
- 8 machines (units of capital) are required to produce 2 units of food.
- 2 Workers (units of labor) are required to produce 1unit food.
- 4 machines (units of capital) are required to produce 2 units of cloth.
- 2 Workers (units of labor) are required to produce 1 unit cloth.
- Total amount of labor: 800 workers.
- Total amount of capital: 1000 machines.
a. Write down the labor and capital constraints formulas?
b. Draw both the labor and capital constraints? Show the PPF curve with no input substitution?
c. Find the opportunity cost of food and cloth in both for both labor and capital constraints?
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