--%>
Assignment Help - homework help

Production function for the game

Question

Can you describe what the production function for the game looks like? (How are labour, capital and resources combined? Are there constant, increasing or decreasing returns to scale?)

Answer

The production function of the game is a fixed proportions production function. Let's first state directly from the rules about the requirements of production:

"A road costs one wood and one brick.

Cities cost three grain and two ore.

Settlements cost one brick, one wood, one grain and one sheep to build.

By paying one sheep, one grain, and one ore, a player can draw a card from the top of the development deck."

Here, we see that road costs one wood and one brick. Similarly, for cities, the input requirements are fixed. This reflects that the input requirements are fixed and specific. A road cannot with built by using wood only; it would require brick as well. Therefore, it is a fixed proportion production function.

There are constant returns to scale in this game, as the fixed proportion production function means that in order to build a city you need three grain and two ore and in order to build 3 cities, you need nine grain and six ore.

   Related Questions in Business Economics

  • Q : What is the opportunity cost of your

    Suppose you arrive at a store expecting to pay $100 for an item, but learn that a store two miles away is charging $50 for it.  Would you drive there and buy it?  How does your decision benefit you?  What is the opportunity cost of your decision?  Now suppose you arrive at a s

    		•
  • Q : Introduction of the term Financial

    Give a brief introduction of the term Financial Leverage?

    		•
  • Q : Absolute advantage in international

    One early involvement of Adam Smith to the theory of gains by international trade, although later thoroughly revised and refined through David Ricardo, was the conception of: (1) mercantilism. (2) absolute advantage. (3) comparative a

    		•
  • Q : Impact of dollar on aspects of

    Question Discuss the impact of dollar depreciation on the various aspects of American Economy. Devaluation of the DollarIntroduction:

    		•
  • Q : Problem on opportunity cost buying a

    After agonizing regarding whether to buy a hot dog or a hamburger along with his last dollar while he goes to the fair, Jeeter at last chooses the hot dog. The hamburger shows Jeeter's: (i) normative choice, because it would be more nutritious. (ii) opportunity cost o

    		•
  • Q : Describe the term-Only to be part with

    Describe the term: “Only to be part with it we want money”?

    		•
  • Q : Decreases in opportunity costs of

    The opportunity costs of production and consumption for most resources and goods tend to be decreased by: (w) private monopoly power. (x) price floors. (y) intense competition. (z) price ceilings. Hey friends pleas

    		•
  • Q : Explain the term leverages Briefly

    Briefly explain the term leverages?

    		•
  • Q : Describe redistributive effects of

    Describe redistributive effects of inflation?

    		•
  • Q : Illustrate the Risks involved with bonds

    Illustrate the Risks involved with bonds?

    		•