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An economy has three workers: Larry, Moe, and Curly. Each works 10 hours a day a...

Mar 25, 2024

An economy has 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. 1)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. Point A •All three spend all their time washing cars. Point B •All three spend half their time on each activity. Point C •Larry spends half his time on each activity, while Moe only washes cars and Curly only mows laws. Point D 2) Graph the production possibilities frontier for this economy. Using your answers to 1), identify points A,B,C, and D on your graph. 3) Explain why the production possibilities frontier has the shape it does. 4) Are any of the allocations calculated in part 1) inefficient? Explain.