Suppose the production possibility frontier for guns (X) and butter (Y) is given by X2 + 2Y2

Question:

Suppose the production possibility frontier for guns (X) and butter (Y) is given by

X2 + 2Y2 = 900

a. Graph this frontier.

b. If individuals always prefer consumption bundles in which Y = 2X, how much X and Y will be produced?

c. At the point described in part b, what will be the slope of the production possibility frontier, and what price ratio will cause production to take place at that point?

d. Show your solution on the figure from part a.

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Intermediate Microeconomics and Its Application

ISBN: 978-0324599107

11th edition

Authors: walter nicholson, christopher snyder

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Question Posted: Jan 21, 2013 04:17 AM

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Suppose the production possibility frontier for guns (X) and butter (Y) is given by X2 + 2Y2

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Step by Step Answer:

a d The frontier is a quarter ellipse b If Y 2X X 2 22X 2 900 9X 2 ...View the full answer

Intermediate Microeconomics and Its Application

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