32.7k views
5 votes
Suppose an economy has two industries producing corn (c) and tractor (t). The production functions for the two industries are.

Yc = min (Lc/2, Kc/1) and Yt = min (Lt/2.5, Kt/3),

where Li and Ki are the amount of labor and capital used in industry i (i = c, t). Constraints for labor and capital endowments are given as follows:

Lc + Lt ≤ 63 and Kc + Kt ≤ 42.

Derive the production transformation curve and show the output vector (Yc, Yt) that corresponds to full employment of both factors? (10 marks)

What range of output price ratio (Pc/Pt) is consistent with the full employment of both factors simultaneously? (10 marks)

User Aaronwolen
by
7.2k points

2 Answers

2 votes

Answer:

The answer would be y/b

Step-by-step explanation:

Its really simple

User Vasia
by
8.2k points
2 votes
i need to answer more questions to pm so i’m doing this
User Ashish Shah
by
7.5k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.