MGMT 1P93 Lecture 4: Chapter-3-hm-sol
8 Nov 2017
School
Department
Course
Professor
Document Summary
It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. a graph out the production possibilities frontier: In the absence of trade, since labor is the only factor of production and supply decisions are determined by the attempts of individuals to maximize their earnings in a competitive economy, only when. There is now also another country, foreign, with a labor force of 800. Foreign"s unit labor requirement in apple production is 5, while in banana production it is 1. a graph foreign"s production possibilities frontier: 3 now suppose world relative demand takes the following form: demand for apples/demand for bananas = price of bananas/price of apples. a graph the relative demand curve along with the relative supply curve: /pp/dd ba ab (cid:296)when the market achieves its equilibrium, we have (cid:295)rd is a hyperbola y.
