Problem Set #1 answer - Econ 101 1.(a) ANSWERS TO PROBLEM...

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Econ 101 ANSWERS TO PROBLEM SET 1 Professor Wissink Cornell University l (L ) l ) limes 1.(a) mp = S)))))) Workers in limes limes L ) labor ))))))))))))))))))))))))))))))))))))))))))))))))))))) 0 0 ))))))))))) 5 1 5 ))))))))))) 3 2 8 ))))))))))) 1 3 9 c (L ) c ) coconuts mp = S)))))))) Workers in coconuts coconuts L ) labor )))))))))))))))))))))))))))))))))))))))))))))))))))))) 0 0 )))))))))) 1 1 1 )))))))))) 1 2 2 )))))))))) 1 3 3 (b) The law of diminishing marginal returns applies only in limes; not in coconuts. In limes the mp decreases with each additional worker, whereas, in coconuts, the mp L L is constant. (c) l c Q Q L L Q limes Q coconuts Q Q l c Q Q L = 3 L = 0 Q 9 Q 0 Q Q l c Q Q L = 2 L = 1 Q 8 Q 1 Q Q l c Q Q L = 1 L = 2 Q 5 Q 2 Q Q l c Q Q L = 0 L = 3 Q 0 Q 3 (d) Let MOC = marginal opportunity cost of coconuts in terms of limes. Let TOC = c c total opportunity cost of coconuts in terms of limes.
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APS1 2 T T ) l T coconuts * limes * MOC = S) * TOC * * c ) c * c * * * 0 * 9 * * * * 1
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This note was uploaded on 03/27/2009 for the course ECON 1110 taught by Professor Wissink during the Fall '06 term at Cornell University (Engineering School).

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Problem Set #1 answer - Econ 101 1.(a) ANSWERS TO PROBLEM...

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