1. Business
  2. Economics
  3. attempts average5 4 problems and applications q4 an economy consists...

Question: attempts average5 4 problems and applications q4 an economy consists...

Question details

Attempts: Average:5 4. Problems and Applications Q4 An economy consists of three workers: Charles, Gilberto, and Lorenzo. Each works 10 hours a day and can produce two services: mowing lawns and washing cars. In an hour, Charles can either mow 1 lawn or wash 1 car; Gilberto can either mow 1 lawn or wash 2 cars; and Lorenzo can either mow 2 lawns or wash 1 car, For each of the scenarios listed in the following table, determine how many lawns will be mowed and how many cars will be washed per day and enter these values into the corresponding row. Scenario All three spend all their time mowing lawns. (A) All three spend all their time washing cars. (B) All three spend half their time on each activity. (C) Charles spends half his time on each activity, while Gilberto only washes cars and Lorenzo only mows lawns. (D) In the following table, identify the opportunity cost of washing cars for each worker. Worker Charles Gilberto Lorenzo Opportunity Cost of Washing CarsAssume that the resources best suited to producing a particular service are preferentially used in the production of that service and that as the economy moves down along the production possibilities frontier, one worker at a time is transferred from mowing lawns to washing cars. Using the blue points (circle symbol), graph the production possibilities frontier (PPF) for this economy on the following graph. Then use the black point (plus symbol) to identify point A, the green point (triangle symbol) to identify point B, the orange point (square symbol) to identify point C, and the purple point (diamond symbol) to identify point D on the graph. PPF 35 30 25 20 15 10 0 5 10 15 20 25 30 35 40 45 50 Quantity of Cars Washed True or False: The production possibilities frontier consists of straight-line segments, rather than being smoothly bowed outward throughout, because each worker faces a constant trade-off between moving lawns and vwashing cars True False Indicate whether each of the following allocations is efficient or inefficient. Allocation Efficient Inefficient Grade It Now Save & Continue Continue without saving

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution