Question
Don't use pen or paper 1) In an economy called Horbort, there is a labor endowment of 26 units. Good x has the production function
Don't use pen or paper
1) In an economy called Horbort, there is a labor endowment of 26 units. Good x has the production function x = 2(Lx)0.5 and good y has the production function y = 5.5Ly, where Lx and Ly are the labor units allocated to sector x and y, respectively. If labor is divided equally between producing x and y, then the resulting output will be (x,y) =
A: (14.4,65.5)
B: (14.4, 71.5)
C: (7.2,71.5)
D: (7.2,65.5)
2) Consider the economy Horbort from problem 1 above. If all labor is used to produce x, then the most x that can be produced in this economy is ___ , but then the y output in the economy will be ___.
A: 10.2;0
B: 10.2;143
C: 8.8; 0
D: 8.8; 143
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