Question
Please look at The economy of Opryland produces two goods - cloth and food. Production of one yard of cloth requires a combination of two
Please look at The economy of Opryland produces two goods - cloth and food. Production of one yard of cloth requires a combination of two work-hours and two machine-hours. The production of food is more automated; as a result, production of one calorie of food requires only one work-hour along with three machine-hours. Thus, all the unit input requirements are fixed at akc = 2, alc = 2, akf = 3, alf = 1 and there is no possibility of substituting labor for capital or vice versa. Assume that an economy is endowed with 6,000 units of machine-hours along with 4,000 units of work-hours.
a. Write down the labor and capital constraints. Plot the production possibilities frontier for the economy (label appropriately to receive full points). Note: For parts (b) through (f), assume the price range is such that both goods are produced.
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