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L Figure 8.9

L Figure 8.9

1910; the price of whale oil rose from its base of £40 per ton after 1835 but had fallen to £25 by 1910. With cat skinning in mind, why?

° 5. Consider an Edgeworth box in which labor and land are fully employed and are divided, say, 50:50 between guns and butter. How would you represent less than full employment of labor? Is more output attainable from putting the unemployed to work? How would you represent unemployment in the corresponding production possibility curve? What is the result in this diagram of putting the unemployed to work? Is there a free lunch?

0 6. Use the Edgeworth box for production to show that if food and all other goods both use land and labor in rigidly fixed proportions (the proportions being different for the two goods and lying on opposite sides of the proportional endowment of land and labor in the nation as a whole), then only one allocation of land and labor to the two goods (that is, only one point in the box) will fully employ both land and labor.

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