# An economy consists of three workers: Larry, Moe, and Curly. Each works ten hours a day

Chapter 2, Problem Problems and Applications 2.4

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QUESTION:

An economy consists of three workers: Larry, Moe, and Curly. Each works ten hours a day and can produce two services: mowing lawns and washing cars. In an hour, Larry can either mow one lawn or wash one car; Moe can either mow one lawn or wash two cars; and Curly can either mow two lawns or wash one car. a. Calculate how much of each service is produced under the following circumstances, which we label A, B, C, and D: All three spend all their time mowing lawns. (A) All three spend all their time washing cars. (B) All three spend half their time on eachactivity. (C) Larry spends half his time on each activity,while Moe only washes cars and Curlyonly mows lawns. (D)b. Graph the production possibilities frontierfor this economy. Using your answers topart (a), identify points A, B, C, and D onyour graph.c. Explain why the production possibilitiesfrontier has the shape it does.d. Are any of the allocations calculated in part(a) inefficient? Explain.

QUESTION:

An economy consists of three workers: Larry, Moe, and Curly. Each works ten hours a day and can produce two services: mowing lawns and washing cars. In an hour, Larry can either mow one lawn or wash one car; Moe can either mow one lawn or wash two cars; and Curly can either mow two lawns or wash one car. a. Calculate how much of each service is produced under the following circumstances, which we label A, B, C, and D: All three spend all their time mowing lawns. (A) All three spend all their time washing cars. (B) All three spend half their time on eachactivity. (C) Larry spends half his time on each activity,while Moe only washes cars and Curlyonly mows lawns. (D)b. Graph the production possibilities frontierfor this economy. Using your answers topart (a), identify points A, B, C, and D onyour graph.c. Explain why the production possibilitiesfrontier has the shape it does.d. Are any of the allocations calculated in part(a) inefficient? Explain.

Step 1 of 3

The production possibility frontier shows a country’s different input allocations that result in the maximum potential output production. A movement to a point beyond PPF needs technology advancement and institutional rearrangement.