# The Sheepherder Case

Topics: Acre, Ox, Cart Pages: 2 (398 words) Published: November 14, 2010
Assignment 1
Exchange rate
Sheep 1 acre of Land - Normal Land - Poor Land 1 Cabin - Deyonne - Batonne 1 Plow 1 Cart - Deyonne - Batonne 1 Ox 1 Coat 1 Goat 4 1 12 8 0.67 How to calculate 10 acres of Land = 40 Sheep 1 poor acre of Land = 1 Sheep 1 Cabin = 3 acres of Land, and 1 acre of Land = 4 Sheep 1 Plow = 2 goat and 1 Goat =0.33 Sheep 2 Carts = 1 poor acre of Land, and 1 poor acre of Land = 1 Sheep 1 Cart = 2 Sheep 1 Ox = 5 Sheep 5 Coat = 25 Goat, and 1 Goat = 0.33 Sheep 3 Goat =1 Sheep

Assumption - Exchange rate is sheep. - Unit of exchange rate is no. of sheep. - Interest rate in the last year is fixed. Therefore, the present value of this year equal to last year. - An acre of poor land equal to one sheep. - Any sheep that belong to others or is owed to others is not counted in personal asset - Property of wife is included in Batonne’s asset. - Two choice acres of land equal to two acres of land.

1 2 5 1.67 0.33

Former Entity Deyonne 362* 20 1 1 2 1 Batonne 360 30 1

Sheep Land Cabin Plow Cart Ox Coat Goat

1 5 10

Remark : * After Deyonne settle 3 sheep to Tyrone

Solution: Our group’s opinion is that sheep is the best indicator to measure the wealth of Deyonne and Batonne to decide who is better off than the other. So, we convert every asset in terms of sheep. For any asset that does not clearly specific the value (e.g: in the case of Deyonne, where 2 carts can be traded for 1 poor acre of land), we try to make a logical new assumption (1 poor acre of land = 1 sheep) that is based on related one (1 acres of Land = 4 sheep).

Entity after convert everything to sheep Deyonne 362 80 12 0.67 1 5 Batonne 360 120 8

Sheep - Land - Cabin - Plow - Cart - Ox - Coat - Goat Summary

Conclusion: After, we convert everything into sheep, the result shows that Batonne has around 505 sheep which is more than Deyonne who has only 461 sheep. Therefore, we can conclude that Batonne has higher position in life than Deyonne.

460.67

5 8.33 3.33...