In: Economics
An economy consists of three workers: Tim, Brian, and Edison. Each works 10 hours a day and can produce two services: mowing lawns and washing cars. In an hour, Tim can either mow 1 lawn or wash 1 car; Brian can either mow 1 lawn or wash 2 cars; and Edison 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 |
Lawns Mowed |
Cars Washed |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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) | |||||||||||||||||||||||||||||
Tim spends half his time on each activity, while Brian only washes cars and Edison only mows lawns. (D) |
In the following table, identify the opportunity cost of washing cars for each worker.
|
Given,
Lawns Mowed | Cars Washed | |
---|---|---|
Tim | 1 | 1 |
Brain | 1 | 2 |
Edison | 2 | 1 |
Potential output
Lawns Mowed | Cars Washed | |
---|---|---|
Tim | 10 | 10 |
Brain | 10 | 20 |
Edison | 20 | 10 |
Now calculating opportunity cost
1 Lawn Mowed | Cars Washed | |
---|---|---|
Tim | 1 car washed | 1 Lawn mowed |
Brain | 2 Cars washed | 0.5 Lawn mowed |
Edison | 0.5 Cars washed | 2 Lawn Mowed |
A.when all mow lawns only
Number of Lawns Mowed = 10 + 10 + 20 = 40 Lawns
B. When all three spend time only washing cars
Number of cars washed = 10 + 20 + 10 = 40 Cars
C. All spend half their time on each activity
Number of lawns mowed = 5 + 5 + 10 = 20 Lawns
Number of cars washed =5 + 10 + 5= 20 cars
D. Tim spends half time in each activity, Brain spends whole time in washing cars and Edison mows lawn only.
Number of lawn mowed = 5 + 0 + 20 = 25 lawns
Number of car washed = 5 + 20 + 0 = 25 cars
Lawns | Cars | Efficient | Inefficient | |
---|---|---|---|---|
A | 40 | 0 | ✅ | |
B | 0 | 40 | ✅ | |
C | 20 | 20 | ✅ | |
D | 25 | 25 | ✅ |
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 mowing lawns and washing cars.
True.
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