Problem Set 1 - Emily Leung Econ 103 Owen Thompson 1a....

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Emily Leung Econ 103 Owen Thompson 1a. Wheat Since the farm outside of Wichita, Kansas has a land constraint of 10 acres; it is impossible to grow outside the line. The trade off for this situation is to either grow all wheat, or graze all cows in the farm. The trade off on the graph is shown by either it is on the line or inside of the line. 1b. Wheat Once there is fertilizer for the farm, the wheat will grow and the land for grazing cows will go down, since the fertilizer will make the wheat grow it reduces the land for grazing cows. After a snowy winter and a good spring moisture, grass will grow more 1
Background image of page 1

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

View Full DocumentRight Arrow Icon
efficiently than wheat, thus from the graph above (pink line) the cows increase while the wheat decreases. 1c. Wheat Because the crop suffers the new PPF shows that there is a smaller limit to grazing cows and growing wheat. After discovering how to integrate the crops the new PPF slopes upwards (blue line). 2a. The circuit of production under capitalism is based on the M – C – C 1 – M 1 . In this procedure, M is the money or the product, C is the commodities, C 1 is the final product, and M 1 is the profit made from improving the product. For capitalists to be successful the following must apply: M 1 > M. In the case of the self-sufficient farmer, the farmer grows his own supply for his own use, when there is a surplus he exchanges it for luxury items. In comparison the farmer cannot make a profit because he equally trades for luxury
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

Problem Set 1 - Emily Leung Econ 103 Owen Thompson 1a....

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online