Question
The Acme produces x and y units of goods Alpha and Beta, respectively.
a. Use a production possibility frontier to explain how the willingness to produce more or less Alpha depends on the marginal rate of transformation of Alpha

Question
A monopsonist buys labor for less than the competitive wage. What type of inefficiency will this use of monopsony power cause? How would your answer change if the monopsonist in the labor market were also a monopolist in the output market?

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Question
Give an example of conditions when the production possibilities frontier might not be concave.

Subject
business economics

Question
In the analysis of an exchange between two people, suppose both people have identical preferences. Will the contract curve be a straight line? Explain. Can you think of a counterexample?

Subject
business economics

Question
Fill in the missing information in the following tables. For each table, use the information provided to identify a possible trade. Then identify the final allocation and a possible value for the MRS at the efficient solution. (Note: There is more than

Question
Jennifer and Drew consume orange juice and coffee. Jennifer’s MRS of orange juice for coffee is 1 and Drew’s MRS of orange juice for coffee is 3. If the price of orange juice is $2 and the price of coffee is $3,

Question
Jane has 3 liters of soft drinks and 9 sandwiches. Bob, on the other hand, has 8 liters of soft drinks and 4 sandwiches. With these endowments, Jane’s marginal rate of substitution (MRS) of soft drinks for sandwiches is 4 and Bob’s

Question
Using general equilibrium analysis and taking into account feedback effects analyze the following:
a. The likely effects of outbreaks of disease on chicken farms on the markets for chicken and pork.
b. The effects of increased taxes on airline tickets

Question
Suppose a bakery has 16 employees to be designated as bread bakers (B) and cake bakers (C), so that B ï?« C ï?½ 16. Draw the production possibilities frontier for bread (y) and cakes (x) for the following production functions: a. y

Question
a. Which country has a comparative advantage in the production of each good? Explain.
b. Determine the production possibilities curve for each country, both graphically and algebraically. (Label the pre-trade production point PT and the post-trade production point P.)
c.