(a) Find the optimal allocation (C", L"), in which Robinson Crusoe acts as a social planner. (b) Now consider a de-centralized economy. That is, think of this economy that consists of many individuals with the identical taste and technology. First, consider a firm's decision problem. The firm produces coconuts (C), employing workers (L). The firm hires L in a competitive market, given the wage rate (w). Without loss of generality, assume the price of coconuts to be P₂ = 1. Given the market wage rate (w), how much labour would a firm hire in order to maximize its profits? Label your answer as Lp, and note that your answer must be a function of w.
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- Robinson Crusoe has exactly 12 hours per day to spend gathering coconuts ( C) or catching fish (F). Let tp denote the time (in hours) spent catching fish and tc the time (in hours) spent gathering coconuts per day. Robinson can catch 3 fish per hour or he can gather 6 coconuts per hour; his "production technology" can thus be described by: F = 3tp and C = 6tc. Robinson's utility function is U(F,C) = FC where F is his consumption of fish and C is his consumption of coconuts. 1. (a) Write down Robinson's time constraint and hence find an equation for his Production Possibility Frontier (PPF). (b) Find the number of fish Robinson will catch per day and the number of coconuts he will gather per day.For the annual school bazaar, Emmy can produce and sell either origami frogs (F) or birds (B). For his origami he needs to work with sheets of paper, glue, and paper clips. Below table shows how many units of each input factor is needed to produce one origami. It also shows the total amount of input units available. Emmy’s profits per origami bird and frog are =1 and =2, respectively. 1:Which formula describes the sheets of paper constraint? a F <= 5 b F <= 6-2/3B c B <= 5 d F <=7-1B 2: Which formula describes the glue constraint? a F <=7-1B b F <= 5 c B <= 5 d F <= 6-2/3B 3: Which formula describes the paper clips constraint? a B <= 5 b F <=7-1B c F <= 6-2/3B d F <= 5 4: The iso-profit line has a slope of negative a…John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7/hr for as many hours as he chooses to work, and cleaning windows for the businesses in downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he cleans a day, as shown in the table below: Cleaning time (hr/day) Total numbers of windows cleaned 0 0 1 7 2345 11 14 16 17 What is John's per-window reservation price to justify the 4th and 5th hours of cleaning windows? A. $7 and $7.5 respectively B. $2 and $3.5 respectively C. $3.5 and $7 respectively D. $11 and $14 respectively
- Assume an economy producing only two goods (shoes and computers) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum. Production in this economy is subjected to the law of diminishing marginal returns and resources are assumed to be fully optimized. In addition, the cost of sacrificing shoes for computers andvice versa is 1. On the basis of the foregoing assumptions, answer the following questions:vi. Assume now that the sacrifice ratio is greater than 1, show what will happen to the shape of the production possibility frontier.How do I graph this? My equilibrium I'm getting P=14 but when I plug that into the equations I'm getting Qs= 21 and Qd= 7.Assume an economy producing only two goods (shoes and computers) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum.Production in this economy is subjected to the law of diminishing marginal returns and resourcesare assumed to be fully optimized. In addition, the cost of sacrificing shoes for computers andvice versa is 1. On the basis of the foregoing assumptions, answer the following questions: i. Draw the economy’s production possibility frontier on hindsight of the relevantassumption.
- 3. Let Robinson Crusoe's Production Possibility curve be given by the equation: ƒ²/2 + g = 150 where f is the amount of fish and g is the amount of grain he can obtain. (think of g as plotted on the vertical axis and f as plotted on the horizontal axis). Robinson's marginal rate of substitution in consumption is MRSc = 9/f. (a) Find Robinson's production-consumption optimum R*. (b) If Robinson is discovered by a world market in which Pf = 5, and Pg = 1, determine his productive optimum Q* and consumption optimum C. (Graph the results).Assume an economy producing only two goods (shoes and computers) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum.Production in this economy is subjected to the law of diminishing marginal returns and resourcesare assumed to be fully optimized. In addition, the cost of sacrificing shoes for computers andvice versa is 1. On the basis of the foregoing assumptions, answer the following questions: Identify three ways by which the economy can attain the level of production outside the PPF.Assume an economy producing only two goods (shoes and computers) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum.Production in this economy is subjected to the law of diminishing marginal returns and resourcesare assumed to be fully optimized. In addition, the cost of sacrificing shoes for computers andvice versa is 1. On the basis of the foregoing assumptions, answer the following questions: Why are points outside the frontier unattainable?
- Suppose your Chaffey college tuition per semester is $4,000 and your extra expenses with the college during the year (books, ather materiais, gas, meals, etc) sum $3,000. If you were not attending college, you could work at firm X and get an annual salary of $ 5,000. What is your opportunity cost of attending college in one year? In your calculations assume that you are taking 2 semesters in a yearAn economy is endowed with 100 units of labor, and the production functions x = 2Lx and y = 4Ly. The utility function for this economy is u(x,y) xy. What is the optimal basket (x,y) for this economy %3D to produce? O (10, 380) O (50, 100), O (100, 200) O (150, 150)An individual's budget Suppose Edison has a weekly budget of $32 to spend on coffee and cereal. Coffee is priced at $4 per cup, and cereal is priced at $2 per box. If Edison spends his entire $32 on coffee, he can buy cups of coffee. If he spends his entire $32 on cereal, he can buy boxes of cereal. Use the blue line ( circle symbol) to plot Edison's budget line on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of coffee and cereal that are affordable for Edison. Finally, place the black point (plus symbol) on the point on Edison's budget line that corresponds to a scenario in which Edison spends $16 on each good. Note: Dashed drop lines will automatically extend to both axes. (?)-OBL, ($32) Affordable Region $16 on Each