ECO 370E Professor Oettinger Economics of Gender, Race, and Ethnicity Spring 2022 Problem Set 2 - Complete and submit associated Canvas quiz by 2:00 PM on Mon., 2/7 1. Claire and Phil each have a daily time endowment of 9 hours to divide between market work and home production. Their (constant) hourly productivityes (in dollars) in each sector are shown in the following table: Claire Phil Market Goods (M) 30 20 Home Goods (H) 10 10 a. Draw the daily PPF of each agent for dollars of home goods and market goods if each agent lives as a single household (putting home goods on the horizontal axis). b. Find each agent's daily consumption level of each good, and the time allocation chosen to achieve it, if each agent lives as a single household and produces/consumes twice as much in market goods as in home goods (i.e., chooses M = 2H). c. Which agent has the absolute advantage in market work? In home production? d. Which agent has the comparative advantage in market work? In home production? Now suppose that Claire and Phil become a couple. They each still have daily time endowments of 9 hours and their productivity are still as described in the table. Answer the following questions if Claire and Phil agree to always divide their time between market work and home production in the same way. i. Draw the PPF of the partnered household. ii. What is the partnered household's total daily output of each good if they choose to produce twice as much in market goods as in home goods (i.e., choose M = 2H)? ili. What daily time allocation must each agent choose to produce the quantities that you found in (ii)? iv. Show that Claire and Phil do not both gain economically (compared to being single) from forming a couple if they divide their combined production in (ii) equally, but that there exists a different division of their joint production in (ii) such that they both gain. f. Answer all of the questions in part (e) if Claire and Phil again form a couple but now agree to allocate their time strictly according to the principle of comparative advantage. 1