Bruno is a landowner and Angela is a farmer who pays a share of her grain output to Bruno for the use of the land, where Bruno makes a take-it-or-leave-it offer. The figure shows Angela and Bruno's feasible frontier and Angela's reservation indifference curve. Now the government introduces new laws that limits Angela's work time and/or sets a minimum pay in bushels of grain. If D is the outcome before any laws, which of the following statements is correct? Bushels of grain 12- Angela's reservation indifference curve 6.5- 4.5 0+ 0 14 16 GT Angela's hours of free time 20 24 Feasible frontier: Angela and Bruno combined + N If the new law limits Angela's working hours to 4 hours, then the outcome will be F. If the new law sets the minimum pay to 4.5 bushels, then the outcome will be l. If the new law limits Angela's working hours to 8 hours and sets the minimum pay to 6.5 bushels, then the outcome will be C. If the new law limits Angela's working hours to 10 hours and sets the minimum pay to 4.5 bushels, then the outcome will be D.
Bruno is a landowner and Angela is a farmer who pays a share of her grain output to Bruno for the use of the land, where Bruno makes a take-it-or-leave-it offer. The figure shows Angela and Bruno's feasible frontier and Angela's reservation indifference curve. Now the government introduces new laws that limits Angela's work time and/or sets a minimum pay in bushels of grain. If D is the outcome before any laws, which of the following statements is correct? Bushels of grain 12- Angela's reservation indifference curve 6.5- 4.5 0+ 0 14 16 GT Angela's hours of free time 20 24 Feasible frontier: Angela and Bruno combined + N If the new law limits Angela's working hours to 4 hours, then the outcome will be F. If the new law sets the minimum pay to 4.5 bushels, then the outcome will be l. If the new law limits Angela's working hours to 8 hours and sets the minimum pay to 6.5 bushels, then the outcome will be C. If the new law limits Angela's working hours to 10 hours and sets the minimum pay to 4.5 bushels, then the outcome will be D.
Chapter1: Making Economics Decisions
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