Suppose both Minnie and Mickey have 6 hours in which they can work- Mi.pdf

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Suppose both Minnie and Mickey have 6 hours in which they can work. Minnie can earn $3 an hour and Mickey earns $8 an hour. Minnie can clean a room in half an hour but it takes Mickey 2 hours to clean a room in his house. Cleaning supplies (which are purchased with wages) cost $6 a unit. The graph above illustrates the Production Possibilities Frontier (PPF) for Minnie and Mickey. A PPF is the same thing as a Production Possibilities Curve (PPC). - Mickey's PPF is in - Minnie's PPF is in - If Mickey and Minnie get married, their joint PPF would be - If they split the fruits of their labor equally, half of their marital output (what they each receive) is represented by the - The represents consumption bundles Mickey and Minnie can consume as a couple that they could not consume as singles. The PPF above assumes that now, Mickey is considering marrying Mabel who also earns $8 an hour and needs two hours to clean a room. It illustrates that Mickey has more to gain by marrying since he and are identical to each other and have nothing to gain from specialization and exchange. The graph shows that they can consume as a couple only as muclof as they each could consume as individuals. On the other hand if he marries he can consume more with her than he can on his own..

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