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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

  1. 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.

  1. What is the output of good B that the country can produce? Explain. (4 marks)

  1. 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)

  1. Calculate the price of good B at the current output level. (5 marks)

  1. Calculate the wage per worker in good A at the current output level. (4 marks)

  1. Calculate the profit of the capital owner of good A at the current output level. (4 marks)

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