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Labor Market Production Possibilities Curve Fenale 5 Consumption goods per year

ID: 1144296 • Letter: L

Question

Labor Market Production Possibilities Curve Fenale 5 Consumption goods per year plect the File/Copy commands in Google to make a copy of the graph in your Google Drive Account, then follow the below instructions to complete the graph in the left hand diagram represent wage discrimination. Locate the Wage discriminator demand curve so it crosses the Supply curve at the coordinates (4,5) and e Demand absent discrimination so it crosses the Supply curve at the coordinates (5,6) in the right hand diagram represent a production possibilities curve (PPC), Assuming inefficiency due to labor market discrimination, represent an initial interior int "A" at coordinates (3,3). Also represent on the PPC a point "B" at the coordinates (3,5; a point "C" at (6,4) and a point "D" at (8,3)

Explanation / Answer

4.

Correct answer:

B.1

Here, the output moves from point A (3, 3) to point C (6, 4).

So, increase in capital goods = 4-3 = 1

5.

Correct Answer:

B.3

Here, the output moves from point A (3, 3) to point C (6, 4).

So, increase in consumption goods = 6-3 = 3