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).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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