Principles of Microeconomics (7th Edition) (Case/Fair Economics 7e Series)

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Economics 2302 Principles of Microeconomics Isaac McFarlin University of Texas at Dallas Solutions to Problem Set 2 WARNING: Before reviewing solutions to problem set, I strongly encourage you to first attempt the problems. Remember that the problem sets are for practice and to help build skills. When you take an in-class exam, you will not have the benefit of solutions next to you. 1. (a) It is a good idea to begin this problem by sketching the individual production possibilities frontiers (PPF) of Jack and Jill. In the problem, they are represented by equations, but from problem set #1, you already know how to graph such equations and should feel comfortable doing so. Jack’s PPF is B = 15 – 3C, and Jill’s PPF is given by B = 20 – C. Each PPF is represented in the graphs below. “Autarky” is a state in which no trade occurs, and each individual consumes what they produce. In the problem, we are explicitly told that Jack produces and consumes 3B and 4C. We are also told that Jill produces and consumes 10B and 10C. Autarky is represented in the
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problem set 2_ans_econ2302 - Economics 2302 Isaac McFarlin...

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