Question

An economy consists of three workers: Larry, Moe and Curly. Each works 10 hours a day and can produce 2 services: mowing lawns and washing cars. In an hour Larry can either mow 1 lawn or wash 1 car; Moe can either mow 1 lawn or wash 2 cars; and Curly can either mow 2 lawns or wash 1 car. If all three spend all their time washing cars, they will wash cars and mow lawns. If all three spend all their time mowing lawns, they will wash cars and mow lawns. f all three spend halif their time on each activity, they will wash cars and mow lawns. If Larry spends half his time on each activity, while Moe only washes cars and Curly only mows lawns, they will wash cars and mow lawns.

Answer 1

1) if all washing cars, then maximum 4 cars & 0 lawns

2) if all mow lawns, then 0 cars & 4 lawns

3) spend half time, then 2 cars & 2 lawns

4) cars .5+2 = 2.5

Lawns 2+.5 = 2.5

Q2) (1) point D

As maximum lawns

(2) point B

Maximum cars

(3) point F

As it is inefficient , so it lies inside PPF

(4) point C

Q3)

every point inside PPF is efficient & points inside PPF is inefficient

So (1) efficient

2) efficient

3) inefficient

4) efficient