# Ch7 - Chapter 7 !&amp;quot; # \$ !# % &amp;quot;...

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Unformatted text preview: Chapter 7 !" # \$ !# % " && '& && ( && ) '&&& ) " ! 1 Econ 3150 York U Chapter 7 * % . & , ' + + , /& ," " ' 0 + ,1 " % ! 2 , + ! 30 ! MPy MPx = 5 1 5 , ! 3 )/ 0 MPy MPx = 10 1 30 # 4 1 ≤ P* ≤ 1 3 Y 10 5 H’s PPF F’s PPF 30 X 5 2 Econ 3150 York U Chapter 7 / 5 0 5 ! ,0 2 ! # X = αL x ; Y = β L y ,3 1 6 ! 1" " , Y αL α = = X βL β 38 38 ! 2 1# ! 0 ,3 7 7 *% Y α (2 * L ) α = = X β (2 * L ) β Y (2 * α ) L α ,3 = = X (2 * β ) L β , ! ( 2 " p X MPL X = w; pY MPLY = w w # = MPL X ; pX 5 w = MPLY pY MPL X 3 α ! MPLY 3 β . 5 9 ! Country Gains Y 2βL Same gains in 2 cases u* P* Y 2β Individual Worker Gains u* P* u* P * Worker’s budget line if labour productivity doubles Worker’s budget line if labour supply doubles βL β αL 2αL X α 2α X 3 Econ 3150 York U Chapter 7 : 9 2 < ( , ! +; , # wF = MPLF = α F ; x pX ( , wF = MPLF = β F y pY ! = ( " + % +; , ! + ! 4 , 4 % + ! ,; ! 4 Econ 3150 York U Chapter 7 ' '1 w h = 10 9 # 13 + , # .# w F = 100 3 ) ) 30 w H 10 = =2 5 XH # # w H 10 = =2 5 YH , , 6 .# ! . w H 100 10 = = 30 3 XH , # w H 10 100 = = = 10 5 10 YH . + + , - . ! 2 # + , 9- # .# p * β H = w H 0*1 y p *α F = w F x 0*1 01 01 αF βH 1 P* * 0 ≤ x ≤ 11 3 Py * Px* wF )6 = H Py* w wF =2 wH 2 2 Px*α F wF =H Py* β H w 5 ( Px* 30 w F ) = Py* 5 w H Px * 1 = Py * 3 ( Px * =1 Py * wF =6 wH wF # 2≤ H ≤6 5 w , + w F 100 = = 10 10 wH 5 Econ 3150 York U Chapter 7 5 - 5 5 + " + + ! 2 - , + p* β H = wH y wH =βH * py p* β H p* H wH y y = = ( * )β * * px px px + - + + + - βH p* y p* x . + ! +; + 6 Econ 3150 York U ...
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