Question

an economy has 100 identical workers. each one can produce four cakes or three shirts, regardless of the number of other individuals producing each good. how many cakes can be produced in this economy when all the workers are cooking?

Answer 1

When all 100 workers in an economy are producing cakes, with each capable of making four cakes, the total production is 400 cakes. This concept is related to the production possibilities frontier and demonstrates the benefits of specialization and division of labor.

Step-by-step explanation:

The question poses a scenario in which there are 100 identical workers in an economy, each capable of producing either four cakes or three shirts. When all workers are dedicated to cooking, we want to determine the total number of cakes produced. If one worker can make four cakes, then 100 workers, all producing cakes, can make a total of 100 workers × 4 cakes/worker = 400 cakes.

This represents a concept in Economics known as the production possibilities frontier, which illustrates the potential output of one or more goods given a certain number of resources (in this case, workers).

The scenario draws a parallel to countries like the United States and Mexico maximizing their output by fully utilizing their labor force, as exemplified by the shoe and refrigerator production examples. Similarly, specialization in producing meals by a baker and a chef leads to higher productivity and efficiency, which is another economic principle known as division of labor.