Question 1

1. Explain why a point on the biological survival constraint is higher (more grain is required)
when Angela has fewer hours of free time. Why does the curve also get steeper when she works
more?
2. Explain why the biologically feasible set is not equal to the economically feasible set.
3. Explain (by shifting the curves) what happens if a more nutritious kind of grain is available for
Angela to grow and consume.

1. When Angela has fewer hours of free time, it implies that she is spending more time
working and less time on leisure activities. This means she has less time to allocate
towards activities like acquiring grain directly. With limited free time, Angela may have
to rely more on purchasing grain or other resources rather than producing them
herself. This increased reliance on market transactions can result in a higher point on
the biological survival constraint, as she needs more resources to compensate for the
time she can't dedicate to direct production or foraging.
The curve getting steeper indicates that as Angela works more hours, the opportunity
cost of leisure increases. In this case, the alternative to working is leisure. As Angela
works more, the additional hours spent working have a higher opportunity cost in
terms of forgone leisure. Therefore, to incentivize her to give up more leisure time,
the compensation in terms of additional grain needs to be higher. This results in a
steeper curve, reflecting the increasing trade-off between work and leisure.

2. Biologically feasible set refers to the range of choices or combinations of goods and
services that are compatible with an individual's biological needs and requirements
for survival and well-being. It is primarily concerned with the basic necessities of life,
such as food, water, shelter, and other essential biological needs. It is shaped by
physiological and health considerations. Economically feasible set, on the other hand,
takes into account the broader economic context and factors in the constraints and
opportunities presented by the market and economic conditions, which is influenced
by factors such as prices of goods and services, income levels, employment
opportunities, market dynamics, and individual preferences. It includes choices
beyond basic biological necessities and encompasses a wider array of goods and
services. While the biologically feasible set is focused on basic biological survival, the
economically feasible set is broader and encompasses a wider range of choices
influenced by market conditions, preferences, cultural factors, and economic
opportunities.

3. More nutritious grain allows Angela to satisfy her biological needs more efficiently,
potentially requiring less land, labor, or other resources to produce the same level of
nutritional outcomes. This shift represents an improvement in the biological efficiency
of resource use. With a more nutritious grain, Angela may find that she can achieve
the same nutritional outcomes or even better outcomes with the same budget. This
shift allows her to allocate resources more efficiently, potentially freeing up resources
for other goods and services or allowing her to achieve a higher level of well-being
 with the same level of income.

Question 2
Would any of the following affect Maria’s best response curve or the firm’s isocost lines for effort
in Figure 6.7? If so, explain how.
1. The government decides to increase childcare subsidies for working parents but not for those
unemployed. Assume Maria has a child and is eligible for the subsidy.
2. Demand for the firm’s output rises as celebrities endorse the good.
3. Improved technology makes Maria’s job easier

1. The increased childcare subsidy can lead to an increase in Maria's best response
curve, indicating that she might be willing to provide more effort (work more hours)
at a given wage rate. If the subsidy reduces the effective cost of childcare for Maria,
she may find it more economical to work longer hours. The firm's isocost lines for
effort would also be affected because the cost of Maria's effort (in terms of childcare
expenses) is now reduced, allowing the firm to hire her services at a potentially lower
cost.
2. Maria's best response curve might shift upward if the higher demand leads to an
increase in wages. She might be willing to provide more effort at the higher wage
rate. The firm's isocost lines for effort may also shift upward if the increase in demand
leads to an increase in the wage rate it is willing to pay for Maria's effort. An increase
in demand for the firm's output might increase the firm's revenue, allowing it to
potentially pay higher wages to Maria without affecting its cost structure significantly.
3. It could potentially reduce the amount of effort (time) required to produce a given
level of output. This might lead to a downward shift in Maria's best response curve,
indicating that she can achieve the same level of output with less effort. The firm's
isocost lines for effort would also be affected because the cost of Maria's effort is
reduced due to improved technology. The firm might be able to achieve a given level
of output with less effort, or it might choose to allocate the saved resources
elsewhere.