1.) both have ten hours of time available. The can use their time to do one of two things: make pancakes or make hamburgers. Bob can make ten hamburgers in an hour or two pancakes in an hour. Jake can make five pancakes in an hour or one hamburger in an hour. Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake a.) Draw Bob and Jake's PPFS with hamburgers on the x-axis. Give equations for both PPFS in y=mx+b form. b.) Who has comparative advantage in the production of hamburgers? Who has comparative advantage in the production of pancakes?
1.) both have ten hours of time available. The can use their time to do one of two things: make pancakes or make hamburgers. Bob can make ten hamburgers in an hour or two pancakes in an hour. Jake can make five pancakes in an hour or one hamburger in an hour. Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake a.) Draw Bob and Jake's PPFS with hamburgers on the x-axis. Give equations for both PPFS in y=mx+b form. b.) Who has comparative advantage in the production of hamburgers? Who has comparative advantage in the production of pancakes?
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter3: Interdependence And The Gains From Trade
Section: Chapter Questions
Problem 5PA
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![1.)
both have ten hours of time available. The can use their time to do one of two things: make
pancakes or make hamburgers. Bob can make ten hamburgers in an hour or two pancakes in an
hour. Jake can make five pancakes in an hour or one hamburger in an hour.
Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake
a.) Draw Bob and Jake's PPFS with hamburgers on the x-axis. Give equations for both PPFS in
y=mx+b form.
b.) Who has comparative advantage in the production of hamburgers? Who has comparative
advantage in the production of pancakes?
c.) Can Bob and Jake mutually benefit from trade if the terms of trade are one pancake per
hamburger? Why or why not?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9afede80-7ab7-4e70-b365-1e404cbce720%2F153f7699-fb77-4093-b401-ccb58d5f77e4%2Fao6aaz2_processed.png&w=3840&q=75)
Transcribed Image Text:1.)
both have ten hours of time available. The can use their time to do one of two things: make
pancakes or make hamburgers. Bob can make ten hamburgers in an hour or two pancakes in an
hour. Jake can make five pancakes in an hour or one hamburger in an hour.
Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake
a.) Draw Bob and Jake's PPFS with hamburgers on the x-axis. Give equations for both PPFS in
y=mx+b form.
b.) Who has comparative advantage in the production of hamburgers? Who has comparative
advantage in the production of pancakes?
c.) Can Bob and Jake mutually benefit from trade if the terms of trade are one pancake per
hamburger? Why or why not?
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