Question

In: Economics

An economy consists of three workers: Tim, Brian, and Edison. Each works 10 hours a day...

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.

Worker

Opportunity Cost of Washing Cars

Tim   
Brian   
Edison   

Assume 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.

PPFABCD0510152025303540455050454035302520151050Quantity of Lawns MowedQuantity 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 mowing lawns and washing cars.

True

False

Indicate whether each of the following allocations is efficient or inefficient.

Allocation

Efficient

Inefficient

A
B
C
D

Solutions

Expert Solution

​​​​​​Given,

Output per hour
Lawns Mowed Cars Washed
Tim 1 1
Brain 1 2
Edison 2 1

Potential output

Output (10 hours)
Lawns Mowed Cars Washed
Tim 10 10
Brain 10 20
Edison 20 10

Now calculating opportunity cost

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.

I am really sorry unable to understand the statement related to por. As I can read aa PPFABCD0510152025303540455050454035302520151050Quantity unable in getting what exactly is required. Please pardon me for the same.


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