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Consider the standard trade model with goods C and F . The PPC curve is given by Q2 F Q2 C = 5. The utility
Consider the standard trade model with goods C and F . The PPC curve is given by Q2 F Q2 C = 5. The utility of the agent is U (qC , qF ) = q 1 2 F q 1 2 C . Let pC = 6 and pF = 8. (4) a. Find the optimal production bundle (QC , QF ). (6) b. Find the optimal consumption bundle (qC , qF ). (2) c. State which good is exported. 1
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Principles Of Macroeconomics
Authors: Lee Coppock, Dirk Mateer
2nd Edition
0393614093, 9780393614091
