David and Rose both work as artists. David can produce 3 small sculptures each day or 18 paintings. Rose can produce 2 sculptures or 6 paintings each day. What is the opportunity cost of sculpting for David? paintings Part 2 Who has a comparative advantage at sculpting? David Rose neither David nor Rose both David an d Rose

David and Rose both work as artists. David can produce 3 small sculptures each day or 18 paintings. Rose can produce 2 sculptures or 6 paintings each day. What is the opportunity cost of sculpting for David? paintings Part 2 Who has a comparative advantage at sculpting? David Rose neither David nor Rose both David an d Rose

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter2: Economic Tools And Economic Systems

Section: Chapter Questions

Problem 3.5P

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. Diego and Darnell are roommates. They spend mostof their time studying (of course), but they leavesome time for their favorite activities: making pizzaand brewing root beer. Diego takes 4 hours to brewa gallon of root beer and 2 hours to make a pizza.Darnell takes 6 hours to brew a gallon of root beerand 4 hours to make a pizza.a. What is each roommate’s opportunity cost ofmaking a pizza? Who has the absolute advantagein making pizza? Who has the comparativeadvantage in making pizza?b. If Diego and Darnell trade foods with each other,who will trade away pizza in exchange for rootbeer?c. The price of pizza can be expressed in terms ofgallons of root beer. What is the highest price atwhich pizza can be traded that would make bothroommates better off? What is the lowest price?Explain.
A worker in country A can produce either 5 computers or 45 tons of rice, while a worker in country B canproduce either 7 computers or 42 tons of rice. a. Graph the production possibilities curve for each country. On which point of the curve would eachcountry produce if the workers spent half of their time producing each good? b. Which country has absolute advantage? Which country has comparative advantage? In theproduction of rise Country A absolute advantage c. If there was trade, which country would specialize in the production of rice? d. At what price of computers would the countries agree to trade?
Suppose that there are 10 million workers inCanada and that each of these workers can produce either 2 cars or 30 bushels of wheat in a year. a. What is the opportunity cost of producing acar in Canada? What is the opportunity costof producing a bushel of wheat in Canada?Explain the relationship between the opportunity costs of the two goods. b. Draw Canada’s production possibilities frontier. If Canada chooses to consume 10 millioncars, how much wheat can it consume without trade? Label this point on the productionpossibilities frontier. c. Now suppose that the United States offers tobuy 10 million cars from Canada in exchangefor 20 bushels of wheat per car. If Canadacontinues to consume 10 million cars, howmuch wheat does this deal allow Canada toconsume? Label this point on your diagram.Should Canada accept the deal?
Both Geppetto and Lewis are toy store owners. They decide that they would like to trade puzzles and puppets in order to better stock their toy store shelves. The table below compares their production possibilities schedules. Production Possibilities Schedules Geppetto Lewis Puzzles Puppets 90 E 0 Puzzles 20 Puppets 75 TH 10 16 8 60 15 12 16 45 20 8 24 30 EHT 25 30 32 40 Instructions: Enter your answers as a whole number. a. Geppetto and Lewis agree to trade at a rate of 3 puzzles for each puppet. With those terms of trade, who is most likely to be the supplier of puzzles? Who is most likely to be the supplier of puppets? Puzzles: (Click to select) Puppets: (Click to select) b. The two toy store owners agree to specialize and to trade 30 puzzles for 10 puppets. The terms of trade are still 3 puzzles for each puppet. How many puzzles and puppets will each one have after they complete their trade? Lewis: puzzles and [ puppets Geppetto: puzzles and puppets
Pat and Kris arc roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Pat takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Kris takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza.a. What is each roommate’s opportunity cost of making a pizza? Who has the absolute advantage in making pizza? Who has the comparative advantage in making pizza?b. If Pat and Kris trade foods with each other, who will trade away pizza in exchange for root beer?c. The price of pizza can be expressed in terms of gallons of root beer. What is the highest price at which pizza can be traded that would make both roommates better off? What is the lowest price? Explain.
Elif can produce 6 pies or 30 cakes in 1 hour. Ahmet can produce 10 pies or 20 cakes in 1hour A) What is the opportunity cost of producing cakes for Elif? What is the opportunitycost of producing cakes for Ahmet?B) Who has a comparative advantage in producing pies and who has a comparativeadvantage in producing cakes?C) On the PPF lines, show what Elif produces and what Ahmet produces when theyspecialize.D) Suppose that they set the exchange price as 1 Pie = 3 Cakes. If they specialize andtrade, show an exchange situation that is beneficial for both (compared to thesituation you found at part (b))?F) What is the minimum and maximum exchange price they could have determined foran exchange that will be beneficial for both of them?
Salads (per hour) 40 35 30 25 ur buy 20 salads from joe 20 Joe buys 10 smoothies 15 from Lie 10 Joe's PPF Li's PPF is 30 15 20 25 40 Smeothles (per hour) The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies. Using the figure above, suppose with no trade Liz and Joe each produce at point A on their respective PPFS. Then, Joe suggests that they specialize and trade. He would produce only salads and Liz would produce only smoothies. Then, Joe says, he would buy 16 smoothies from Liz at a price of 1.5 salads per smoothie. Liz should A) accept Joe's offer since she will gain 4 salads, but no smoothies B) accept Joe's offer since she will gain 4 smoothies and 4 salads. OC) not accept Joe's offer since she would lose 2 smoothies and 2 salads. D) accept Joe's offer, as she will be as well off as with no trade.
个 The table shows Frigidia's production possibilities. Fish (pounds per month) 300 200 100 0 Draw the four points defined in the table. Use the four-point line tool to draw the PPF. Label it. and and and and Skis (pairs per month) 0 50 100 150 If Frigidia produces 200 pounds of fish per month, how many pairs of skis must it produce to achieve production efficiency? Frigidia must produce pairs of skis to achieve production efficiency. What is Frigidia's opportunity cost of producing 1 pound of fish and 1 pair of skis? pairs of The opportunity cost of 1 pound of fish is skis 300- 250 200- Fish (pounds per month) 150- 100- 50- 25 50 75 100 125 Skis (pairs per month) 150 17!
use a diagram to ishow how ppf illustrates the loss of resources for a country
Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have ten hoursof time available. The can use their time to do one of two things: make pancakes or make hamburgers.Bob can make two hamburgers in an hour or one pancake in an hour. Jake can make three pancakes in anhour or two hamburgers in an hour. Use this information to answer the following questions:a.) Draw Jake and Bob’s PPFs, with hamburgers on the x-axis.b.) Give equations for Jake and Bob’s PPFs in y = mx+b form, still treating hamburgers as the xvariable.c.) Who has absolute advantage in the production of hamburgers? Who has absolute advantage inthe production of pancakes?d.) Who has comparative advantage in the production of hamburgers? Who has comparativeadvantage in the production of pancakes?e.) Can Bob and Jake both benefit from trade if the terms of trade are one pancake per hambruger?Why
Both Geppetto and Lewis are toy store owners. They decide that they would like to trade puzzles and puppets in order to better stock their toy store shelves. The table below compares their production possibilities schedules. Production Possibilities Schedules Geppetto Lewis Puzzles Puppets Puzzles Puppets 90 75 10 8 60 15 12 16 45 20 8 24 30 25 32 40 030 Instructions: Enter your answers as a whole number. a. Geppetto and Lewis agree to trade at a rate of 3 puzzles for each puppet. With those terms of trade, who is most likely to be the supplier of puzzles? Who is most likely to be the supplier of puppets? Puzzles: (Click to select) Puppets: (Click to select) b. The two toy store owners agree to specialize and to trade 30 puzzles for 10 puppets. The terms of trade are still 3 puzzles for each puppet. How many puzzles and puppets will each one have after they complete their trade? Lewis: puzzles and puppets Geppetto: puzzles and puppets
Pat and Kris are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Pat takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Kris takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. A.What is each roommate’s opportunity cost of making a pizza? Who has the absolute advantage in making pizza? Who has the comparative advantage in making pizza? B.If Pat and Kris trade foods with each other, who will trade away pizza in exchange for root beer? C.The price of pizza can be expressed in terms of gallons of root beer. What is the highest price at which pizza can be traded that would make both roommates better off? What is the lowest price? Explain.