An economy can produce good 1 using labor and capital and good 2 using labor and land. The total supply of labor is 100 units. Given the supply of capital, the outputs of the two goods depend on labor input as follows:
|
Labor Input to Good 1
|
Output of Good 1
|
Labor Input to Good 2
|
|
0
|
0
|
0
|
|
10
|
25.1
|
10
|
|
20
|
38.1
|
20
|
|
30
|
48.6
|
30
|
|
40
|
57.7
|
40
|
|
50
|
66
|
50
|
|
60
|
73.6
|
60
|
|
70
|
80.7
|
70
|
|
80
|
87.4
|
80
|
|
90
|
93.9
|
90
|
a. Graph the production functions for good 1 and good 2.
b. Graph the production possibility frontier. Why is it curved?