problem1 301 f07

# Intermediate Microeconomics: A Modern Approach, Seventh Edition

• Homework Help
• PresidentHackerCaribou10582
• 2

This preview shows pages 1–2. Sign up to view the full content.

Econ 301 – F07 PROBLEM SET 1 - due in class on Tuesday September 11 Wissink 1. Argentina and Brazil both produce leather and coffee with labor. The labor input is measured in hours, coffee is measured in gallons and leather is measured in yards. The table below shows labor requirements to produce a unit of coffee and of leather in each country. (It is assumed that the labor requirements per unit of output in production remain the same irrespective of the quantity of the two goods produced.) Each country has 120 hours of labor available, which can be allocated between the two activities. Labor can not go from one country to the other but coffee and leather can. HOURS REQUIRED Argentina Brazil 1 gallon of coffee 10 hrs 4 hrs 1 yard of leather 15 hrs 20 hrs a. Graph the production possibilities frontier (PPF) for both Argentina and Brazil (separately) clearly labeling the axes. (Note: The labor requirements per unit of output remain constant irrespective of the quantity produced.) b. What is the opportunity cost of producing an extra gallon of coffee in Argentina? In Brazil? c. What is the opportunity cost of producing an extra yard of leather in Argentina? In Brazil? d. Suppose that both Argentina and Brazil are self sufficient i.e., they each rely on their own production for their consumption and do not trade with each other. Also assume that each nation

This preview has intentionally blurred sections. Sign up to view the full version.

This is the end of the preview. Sign up to access the rest of the document.
• Summer '07
• WISSINK

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern