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February 21st, 2018, 07:46 PM  #1 
Member Joined: Mar 2017 From: Israel Posts: 70 Thanks: 2  Microeconomics
Hello Can you help me please about the next exercise: A farm produces two products, X and Y. The farm has 100 employees (men) and 100 employees (women). Each man can produce 3 units of X or 9 units of Y. Each woman can produce 5 units of X or 5 units of Y. The farm is always interested in consuming Y products in 100 units more than X, in other words, y = x + 100. The global price of product X is 4\$, and the global price of product Y is 2\$. Can a change in the price of Y product allow the farm to reach 800 units of X and 900 units of Y of consumption? If yes, find the new price. This is the fourth section of question, because I solved the last sections, if you want to know what were the last sections, just say. And sorry for my bad English; if you didn't understand something, I will explain. Thanks! Last edited by skipjack; February 21st, 2018 at 08:04 PM. 
February 21st, 2018, 08:13 PM  #2 
Member Joined: Mar 2017 From: Israel Posts: 70 Thanks: 2 
Oh yes, I forgot, the answer is: yes, 6.4$. But I don't know why and how it's 6.4$. 
February 21st, 2018, 08:19 PM  #3 
Global Moderator Joined: Dec 2006 Posts: 19,295 Thanks: 1686 
Your post doesn't make mathematical sense, as there's nothing to link the global prices with anything else mentioned. Please check it for errors very carefully.

February 21st, 2018, 10:04 PM  #4 
Member Joined: Mar 2017 From: Israel Posts: 70 Thanks: 2  
February 21st, 2018, 11:07 PM  #5 
Global Moderator Joined: Dec 2006 Posts: 19,295 Thanks: 1686 
The initial assertions that the farm and its employees are producing X and Y are followed by references to the farm's consumption of X and Y. Is the farm producing or consuming? Also, the maximum production seems to be 900 units by the men and 500 units by the women, which is 1400 units in total, so how could production reach a total of 800 + 900 = 1700? If production of Y exceeds production of X by 100, the maximum production is 675 units of Y by 75 of the men, and 575 units of X by the rest of the employees, which is a total of 1250 units. 
February 22nd, 2018, 03:20 AM  #6 
Senior Member Joined: May 2016 From: USA Posts: 1,084 Thanks: 446 
In addition to the obscurities mentioned by skipjack, there are other, more purely economic obscurities about your question. If more than 900 Y and 500 X can be produced (say by hiring more men and women or having them work longer hours) that would presumably change the unit cost of production, but you have told us nothing about cost functions so there is no way to equate price and the marginal cost of production. You may not have to provide all the information given in the problem, but you do have to provide sufficient information for us to determine how to solve the problem. You have given us no information about flexibility inherent in the production function or about the cost function. We can guess that the firm faces a total elastic demand function, but you have not explicitly said so. And there is a slightly mysterious reference to global prices without any reference to local prices, giving rise to a suspicion that the farm may have different cost functions for the global and local markets. Last edited by JeffM1; February 22nd, 2018 at 03:27 AM. 

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