Hints for Economics 452 Problem Set Two

Hints for Economics 452 Problem Set Two - Hints for...

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Hints for Economics 452 Problem Set Two Work on each question as we complete that portion of chapter 5 (after practicing on corresponding exercise) so do not put it all off until just before due. Do a rough draft first, then copy more neatly to version you turn in. Write your solutions neatly on a printout of the questions and staple pages together before turning in your problem set. 1&2. See Example 5.1 Factors and Output (slides 15-19) and Example 5.2 Increase in Capital (slides 29-32). Since graph says to put wheat on the vertical axis, wheat takes the place of food and steal is like cloth. When writing the equations for the factor constraints, make sure to write the labor or capital constraint form with general notation first, then plug the numbers in (be careful to plug in correctly), then rearrange to be in slope intercept form (with wheat on the left-hand side). You do not need to show your calculations for the steel and wheat endpoints of each constraint, but do need to put those numbers on the graph. When drawing the factor constraints, wait until you have
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