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A craftsman builds two kinds of birdhouses, one for wrens (X1), and one for bluebirds (X2). Each wren birdhouse takes four hours of labor and four units of lumber. Each bluebird house requires two hours of labor and twelve units of lumber. The craftsman has available 60 hours of labor and 120 units of lumber. Wren houses profit $6 each and bluebird houses profit $15 each.
Use the software output that follows to interpret the problem solution. Include a statement of the solution quantities (how many of which product), a statement of the maximum profit achieved by your product mix, and a statement of "resources unused" and "shadow prices."
Dollar Appreciated
A situation where the value of the US dollar increases relative to other currencies, making foreign goods and services cheaper for Americans.
Real Exchange Rate
The rate at which two different currencies can be exchanged, taking into account their respective purchasing power.
Nominal Exchange Rate
The rate at which one currency can be exchanged for another currency, without adjustment for inflation.
Purchasing-Power Parity
An economic theory that compares different countries' currencies through a "basket of goods" approach, to assess the relative value of each currency.
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