1. Suppose Worker A and Worker B produce knives and forks. Worker A has to work for 2 hours to produce a knife and for 5 hours to produce a fork. Worker B needs 10 hours to produce a knife, but only 1 hour to produce a fork. Every day, each Worker devotes 20 hours to the production of the two kitchen utensils. Use this information to answer the following questions. a. How many hours does Worker A need to produce 5 knives? How many hours does Worker B need to produce 5 knives? b. How many forks can Worker A produce in 1 hour? How many forks can Worker A produce in 10 hours? . c. Assuming Worker A only works on knives, how many knives can he produce in 20 hours? Assuming Worker A only works on forks, how many forks can he produce in 20 hours? d. Assuming Worker B only works on knives, how many knives can he produce in 20 hours? Assuming Worker B only works on forks, how many forks can he produce in 20 hours? e. Fill out the following table: Opportunity cost of 1 knife (in terms of fork) Opportunity cost of 1 fork (in terms of knife) Worker A Worker B f. Who has the absolute advantage in producing knives? Who has the absolute advantage in producing forks? g. Who has the comparative advantage in producing knives? Who has the comparative advantage in producing forks?
1. Suppose Worker A and Worker B produce knives and forks. Worker A has to work for 2 hours to produce a knife and for 5 hours to produce a fork. Worker B needs 10 hours to produce a knife, but only 1 hour to produce a fork. Every day, each Worker devotes 20 hours to the production of the two kitchen utensils. Use this information to answer the following questions. a. How many hours does Worker A need to produce 5 knives? How many hours does Worker B need to produce 5 knives? b. How many forks can Worker A produce in 1 hour? How many forks can Worker A produce in 10 hours? . c. Assuming Worker A only works on knives, how many knives can he produce in 20 hours? Assuming Worker A only works on forks, how many forks can he produce in 20 hours? d. Assuming Worker B only works on knives, how many knives can he produce in 20 hours? Assuming Worker B only works on forks, how many forks can he produce in 20 hours? e. Fill out the following table: Opportunity cost of 1 knife (in terms of fork) Opportunity cost of 1 fork (in terms of knife) Worker A Worker B f. Who has the absolute advantage in producing knives? Who has the absolute advantage in producing forks? g. Who has the comparative advantage in producing knives? Who has the comparative advantage in producing forks?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:1. Suppose Worker A and Worker B produce knives and forks. Worker A has to work for 2 hours to
produce a knife and for 5 hours to produce a fork. Worker B needs 10 hours to produce a knife, but
only 1 hour to produce a fork. Every day, each Worker devotes 20 hours to the production of the
two kitchen utensils. Use this information to answer the following questions.
a. How many hours does Worker A need to produce 5 knives? How many hours does Worker B need
to produce 5 knives?
b. How many forks can Worker A produce in 1 hour? How many forks can Worker A produce in 10
hours? .
c. Assuming Worker A only works on knives, how many knives can he produce in 20 hours?
Assuming Worker A only works on forks, how many forks can he produce in 20 hours?
d. Assuming Worker B only works on knives, how many knives can he produce in 20 hours?
Assuming Worker B only works on forks, how many forks can he produce in 20 hours?
e. Fill out the following table:
Opportunity cost of 1 knife
(in terms of fork)
Opportunity cost of 1 fork
(in terms of knife)
Worker A
Worker B
f. Who has the absolute advantage in producing knives? Who has the absolute advantage in
produc ing forks?
g. Who has the comparative advantage in producing knives? Who has the comparative advantage in
produc ing forks?
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