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Alex has 1 day to work, and he can produce two goods, bread b and wine w. If he devotes a fraction of his day
Alex has 1 day to work, and he can produce two goods, bread b and wine w. If he devotes a fraction of his day Lb 1 to bread making, he can make Lb units of bread. If he devotes a fraction of the day Lw 1 to wine making, he can produce ln(1+Lw) units of wine. He does nothing else with his time, so Lb+Lw =1
By calculating how much wine Alex can make with the time he has left over (having made b units of bread), show that his PPF is characterized by the equation w=ln(2-b2) for b 1
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