Question
Robinson and Friday are the only people on Despair, a small island. They both produce grain and meat. Let G denote the quantity of grain,
Robinson and Friday are the only people on Despair, a small island. They both produce grain and meat. Let G denote the quantity of grain, and M denote the quantity of meat. The following equations summarize their production possibility curves (PPCs) per week.
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Robinson: G = 21 7M
Friday: G = 156 8M
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1. Suppose Despair is a closed economy. If Robinson and Friday would like to jointly consume 16 units of meat per week, they would be able to jointly consume a maximum of [Answer] units of grain per week.
(In decimal numbers, with two decimal places, please.)
Answer=52.00
2. Continue with the previous question. In this closed economy, any admissible terms of trade between Robinson and Friday have to smaller than [Answer] units of grain per unit of meat.
(In decimal numbers, with two decimal places, please.)
Answer=8.00
3. Continue with the previous question. Suppose Despair is now opened up to trade with the rest of the world, and can trade at world terms of trade of 11.7 units of grain per unit of meat. If Robinson and Friday would like to jointly consume 16 units of meat per week, they would be able to jointly consume a maximum of [Answer] units of grain per week.
(In decimal numbers, with two decimal places, please.)
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