Suppose we want 6
loaves of BREAD. |
Q_{B} = 6 |
How much CLOTH
can we produce? |
Q_{C} = ? |
BAKING 6
loaves of BREAD
takes 3
hours of LABOR. |
L_{B} =
b Q_{B }
= (.5)
6 = 3 |
7
hours remain for WEAVING CLOTH |
L_{C}
= L - L_{B} = 10
- 3 = 7 |
BAKING 6
loaves of BREAD
requires 48
units of CAPITAL. |
K_{B} =
d Q_{B }
= (8)
6 =
48 |
52
units remain for WEAVING CLOTH. |
K_{C}
= K-
K_{B}
= 100-
48 =
52 |
Iin
7 hours we can WEAVE
at most 7
yards of CLOTH |
Q_{CL} = L_{C }
/ c = 7 / 1 = 7 |
With 52
units of CAPITAL
we can WEAVE
at most
8.66
yards of CLOTH |
Q_{CK} = K_{C }
/e = 52/6 =
8.66 |
Taking both LABOR
and CAPITAL
in
consideration
we cannot produce
more than 7
yards of CLOTH. |
Q_{C }
= min( Q_{CL},
Q_{CK} ) =
7 |
10
units of CAPITAL
remains unutilized. |
(Q_{CK} -
Q_{CL})6
= 10 |