3. micro - c- If we invest some of our resources for...

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Maya Cohen ID 066370065 Exercise 3 Shortage and alternative cost Question 1 The agriculture technological improvement produced scars in man power. We know that because they haven't grown in quantity produced although they had an improvement. The man power moved to the industry therefore achieving more of its potential. The innovation enabled the industry to grow. Question 2 1) The improvement in X created extra resources. These resources went to the y sector therefore creating improvement in the sector. And not on the X sector. 2) The total alternative cost decreased. We are losing less products of y to get the same amount of x. 3) It decreased as well. b. 1) The extra resources created in the X factor, were added to the X arena. Increasing the amount of X. The amount in y remained the same. 2) Hasn't changed. 3) The marginal cost decreased as well. Question 3 b- If we choose not to invest for tomorrow then our possibilities goes down.
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Unformatted text preview: c- If we invest some of our resources for tomorrow then than our investors frontier grows. The red line represents the amount of food you have to eat today, unless you starve. Going back up from that point is much harder because you can forgo for investment smaller amounts. question 4 For producing 10 goods we need 1 machine+10 workers. The marginal alternative cost for producing machine is: 900+0/180+0= 5 units of consumption goods. If we oblige to the ministry of labor there would be 900 goods created, and only 100 people unemployed in the market. Investing in goods creates a higher standard of living today but leaves no room of investing in the machinery that later on would create more employment. By allocation some of the resources into machinery production we create 140 people unemployed today. But we are investing in a product that would benefit us later....
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This note was uploaded on 10/25/2009 for the course BUSINESS 772 taught by Professor Sadeh during the Spring '07 term at Interdisciplinary Center Herzliya.

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3. micro - c- If we invest some of our resources for...

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