1. (From slides, with some changes) Using the following table, answer questions Output per Cooking Washing dishes hour $10 Peter Mary $5 $10 $5 a) i) State whether the following statement is True, False, or uncertain: Given the information in the table, an efficient division of labour would have Peter and Mary alternate (take turns) cooking dinner and washing up. ii) Explain your answer to i). iii) Draw a production possibility frontier (ppf) for 2 hours for Peter and Mary, where they specialize in the activity in which each has a comparative advantage. The horizontal axis should be output from cooking. iv) Draw a production possibility frontier (ppf) for 2 hours for Peter and Mary, where they specialize in the activity in which each has a comparative DISadvantage. v) Compare the two ppfs and discuss how the choice of specialization affects the amounts they can consume. b) Explain how the assumption of constant marginal product of labour affects the answer to a).

1. (From slides, with some changes) Using the following table, answer questions Output per Cooking Washing dishes hour $10 Peter Mary $5 $10 $5 a) i) State whether the following statement is True, False, or uncertain: Given the information in the table, an efficient division of labour would have Peter and Mary alternate (take turns) cooking dinner and washing up. ii) Explain your answer to i). iii) Draw a production possibility frontier (ppf) for 2 hours for Peter and Mary, where they specialize in the activity in which each has a comparative advantage. The horizontal axis should be output from cooking. iv) Draw a production possibility frontier (ppf) for 2 hours for Peter and Mary, where they specialize in the activity in which each has a comparative DISadvantage. v) Compare the two ppfs and discuss how the choice of specialization affects the amounts they can consume. b) Explain how the assumption of constant marginal product of labour affects the answer to a).

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter1: Welcome To Economics!

Section: Chapter Questions

Problem 10RQ: Give the three reasons that explain why the division of labor increases an economys level of...

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