My question comes from International Economics by Krugman 9th edition. Chapter 4
ID: 1258867 • Letter: M
Question
My question comes from International Economics by Krugman 9th edition. Chapter 4. In question 3a, the Chegg solutions divide the MPL in sector 1 and 2 by 10, and I don't understand why. Why don't you just use the MPLs stated in the questions? Thanks
This is question 3
This is a snippet of Cheggs solution
2. 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 Good1 Labor Input to Good 2 Output of Good 2 0.0 25.1 38.1 48.6 57.7 66.0 73.6 80.7 87.4 93.9 0 10 20 0 10 20 0.0 39.8 61.8 69.3 75.8 81.5 86.7 91.4 95.9 100 70 70 100 100 100 a. Graph the production functions for good 1 and good 2 b. Graph the production possibility frontier. Why is it curved? 3. The marginal product of labor curves corresponding to the production functions in problem 2 are as follows: Workers Emplo MPL in Sector 1 15.1 11.4 0.0 8.7 7.8 MPL in Sector2 15.9 10.5 10 20 6.9 6.0 5.4 5.0 4.6 70 80 6.9 6.6 100 6.0 4.0 a. Suppose that the price of good 2 relative to that of good 1 is 2. Determine graphi cal lly the wage rate and the allocation of labor between the two sectors.Explanation / Answer
Marginal Product of Labour = (Change in Quantity)/(Change in Labour)
As we can see from the question that the MPL is derived from problem 2 there is no need to divide MPL by 10.
You have rightly pointed out the mistake.
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