Question
I am struggling with this econ homework, please be SPECIFIC with your solution. I rate all of my answers. The company Clean It has three
I am struggling with this econ homework, please be SPECIFIC with your solution. I rate all of my answers.
The company Clean It has three individual manufactures that make sanitizers and disinfecting wipes. Each production site has different abilities to manufacture these items (each has separate manufacturing functions), and each manufacturer has constant opportunity costs. Manufactory one can generate 200 sanitizers per period when it only produces sanitizers. On the other hand, it can generate 100 disinfecting wipes when it is only focused on making these disinfecting wipes. With that being said, every period manufacture two can generate 100 sanitizers or 100 disinfecting wipes, and every period manufacture three can generate 50 sanitizers or 100 disinfecting wipes.
1. Draw the individual PPFs for each plant with sanitizers on the y-axis.
2. State the opportunity cost of producing one sanitizer for each manufacturer and producing one disinfecting wipe for each factory.
Considering the fact that Clean It can make use of all manufacturers, it can select which manufactories generate sanitizers, disinfecting wipes, or a mixture of two of them. Using information from 1. and 2., you will build a Production Possibilities Frontier.
3. State the maximum number of basketballs and the maximum amount of disinfecting wipes that Clean It can generate per period.
4. Fabricate the Production Possibilities Frontier for Clean It by putting together the three manufacturers' PPFs (with sanitizers on the y-axis). Label axes, transition points, and what part of the PPF goes to which manufacture. (Tip: Suppose Clean it starts off generating the maximum number of sanitizers. It now wants to generate 100 disinfecting wipes, which entails shifting one of its manufactures out of producing sanitizers. Think of which manufacture would be the smartest to use.)
Explain why the shape of the PPF is the way it is and what does it signify about the opportunity cost at the firm level?
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