no Homework: Chapter 3 Homework ON ST Score: 0 of 1 pt HW Score: 33.35% 5 of 15

Question

no Homework: Chapter 3 Homework ON ST Score: 0 of 1 pt HW Score: 33.35% 5 of 15 pts Chapter Problem 2 Home has 1,200 units of labor available. It can produce two goods, apples and production it is 2 There is now also another country, Foreign, with a labor force (L) of 800 Question Help The unit labor requirement in apple production is 3, while in banana Choice A RS st Foreign's unit labor requirement in apple production (aA) is 5, while in banana production (aua) t is 1 ossbiy tonker asme quantity of bananas is the dependent variatde) 0 025 05 075 1 125 15 Relaive quantity of apples Choice B Enter your answer in the edit fields and then click Check Answer. remaining

Explanation / Answer

Answer

a)

Foreign's labor Force = 800. 5 unit of labor are required to produce 1 apple and 1 unit of labor is required to produce 1 unit of Banana. Hence opportunity cost for 1 apple is 5 unit of Banana and opportunity cost is constant hence Opportunity cost is a straight Line. If it produces only Banana It can produce 800 units of bananas and If it produce only apple then It can Produce 800/5 = 160 Apples.

Now Assume Banana is on Y axis and Apple is on X axis. Hence We have 2 coordinates (160,0) and (0,800) Now we have two coordinates for (A,B) where A is for quantity of Apple and B is for quantity of Bananas and also as discussed above PPF is a straight Line. Hence PPF is given by:

B - 800 = ((800 - 0)/(0-160))*(A - 0).

=> B = 800 - 5A

Hence Equation of Foreign Production Possibility Frontier is given by:

B = 800 - 5A

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.