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X Country has a total of 10 workers. The labour input and quantities output of good A and B are shown in the table below.
X Country has a total of 10 workers. The labour input and quantities output of good A and B are shown in the table below. Labour is mobile factor; capital and land are specific factors of goods A and B respectively. The wage is the only cost of the employers.
Labour Input | Quantity of Output of Good A | MPLA | Quantity of Output of Good B | MPLB |
0 | --- | --- | ||
1 | 84 | 105 | ||
2 | 129 | 168 | ||
3 | 171 | 225 | ||
4 | 210 | 276 | ||
5 | 237 | 318 | ||
6 | 261 | 357 | ||
7 | 282 | 393 | ||
8 | 297 | 423 | ||
9 | 309 | 447 | ||
10 | 315 | 459 |
- Fill in the marginal products of labour for good A (MPLA) and good B (MPLB) at labour input of 1 to 10 in the table above. No need to show your calculations for this part. (5 marks)
Suppose the current output of good A is 282 and the price of good A is $20 per unit.
- What is the output of good B that the country can produce? Explain. (4 marks)
- Calculate the slope of the production possibility function (with good A on the y-axis and good B on the x-axis) of the current output level. Take 2 decimal places. (5 marks)
- Calculate the price of good B at the current output level. (5 marks)
- Calculate the wage per worker in good A at the current output level. (4 marks)
- Calculate the profit of the capital owner of good A at the current output level. (4 marks)
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