Determine linear combination of chickens and potatoes

Assignment Help Econometrics

Reference no: EM13187154

Michelle and James each live alone in an isolated region. They each have the same resources available, and they grow potatoes and raise chickens. If Michelle devotes all her resources to growing potatoes, she can raise 200 pounds of potatoes per year. If she devotes all her resources to raising chickens, she can raise 50 chickens per year. (If she apportions some resources to each, then she can produce any linear combination of chickens and potatoes that lies between those extreme points. If James devotes all his resources to growing potatoes, he can raise 80 pounds of potatoes per year. If he devotes all his resources to raising chickens, he can raise 40 chickens per year. (If he apportions some resources to each, then he can produce any linear combination of chickens and potatoes that lies between those extreme points.)

Michelle
200 = potatoes (1potato = 1/4 Chicken) - comparative advantage
50 = Chickens

James
80 = potatoes
40 = Chickens (1 potato = 2 Chickens) - comparative advantage

Suppose that they are thinking of each specializing completely in the area in which they have a comparative advantage, and then trading at a rate of 2.5 pounds of potatoes for 1 chicken, would they each be better off?

Reference no: EM13187154

Questions Cloud

Economys production possibilities before natural disaster : There are two goods in the economy, anchovies (a fish) and bananas (a farm product). Draw the economy's production possibilities before and after a natural disaster that lowers the banana harvest but does not affect anchovies.

State what is the specific heat for the metal : What is the specific heat for the metal? Express your answer with the appropriate units. B) The molar heat capacity of silver is 25.35 J/mol

State the meat must be ingested for a person to meet : Health Canada recommends a an upper level intake of Na to be 2300 mg. How many ounces (oz) of the meat must be ingested for a person to meet this level?

Compute the total number of ions in a single crystal : Calculate the total number of ions in a single crystal of epsomite. Assume a crystal is cube?

Determine linear combination of chickens and potatoes : Michelle and James each live alone in an isolated region. They each have the same resources available, and they grow potatoes and raise chickens. If Michelle devotes all her resources to growing potatoes, she can raise 200 pounds of potatoes per y..

What are domain and image of the absolute value function : what are the domain and the image of the absolute value function?

Compare the release in the scrubbed flue gas : Compare the release of S02 in the scrubbed flue gas (determined in Problem 14.6) with the EP A limit of no more than 520 nanograms S02 per joule of heat input to the boiler.

Identify the consumption or investment of goods : Identify the following as consumption or investment goods or both. Justify your answers an iPod a share of stock the Trans-Canada highway a ski lift an unsold truck by a GM plant in Ontario My textbook didn't go into too much detail on this subject.

What are the three basic management skills : Two months later, Mrs. Dodge split the workforce into two specialty groups, appointing Betty as the supervisor of one section and taking the other for herself. Betty's group consisted of three people: the two newest, whom she had trained, and one ..

User Account

All Pages