GSB 611-1.docx - Nydia Perez GSB 611-99 Homework 1 1 a...

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Nydia Perez GSB 611-99 Homework 1 1. a. 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. © Larry Spends half his time on each activity, while Moe only washes card and Curly only mows lawns. (D) b. c. The productions possibilities frontier has the above shape given the time all workers are able to mow lawns and/or wash cars. If they all mow only lawns, between the three workers 40 lawns get mowed. Similarly, of all workers only wash cars, then 40 cars get washed. However, we can also consider the possibilities of the person who has the lowest opportunity cost for washing cars. In this case, Moe’s opportunity cost of washing a car is mowing half a lawn, therefore the possibilities from (0,40) shift to (20,30) representing Moe’s trade-off between washing cars and mowing lawns. Moreover, we consider the possibilities of the person who has the lowest opportunity cost for mowing lawns. In this case,
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