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1. The following table shows the total number of hats or baskets that the tribes of Dakal and Sele can produce given their resources. Dakal Sele Hats 10 5 a) Who has an absolute advantage in the production of Hats? b) Who has an absolute advantage in the production of Baskets? c) Find the Opportunity Costs of producing Hats and Baskets for both tribes: For Dakal: OC of 1 Hat= OC of 1 Basket = For Sele: OC of 1 Hat OC of 1 Basket = 1 Hat= 1 Basket = Baskets 70 30 d) Who has comparative advantage in the production of Hats? In Baskets? Comparative Advantage in Hat= Comparative Advantage in Basket - e) What should the terms of trade have to be both tribes to gain from trade? (Give me a range) f) If the terms of trade were 1 Hat=7 Baskets, who would refuse to trade - the tribe selling hats or the tribe selling baskets? Circle the correct answer: o Tribe selling hats will refuse o Tribe selling baskets will refuse o Neither tribe will refuse o Both tribes will refuse

1. The following table shows the total number of hats or baskets that the tribes of Dakal and Sele can produce given their resources. Dakal Sele Hats 10 5 a) Who has an absolute advantage in the production of Hats? b) Who has an absolute advantage in the production of Baskets? c) Find the Opportunity Costs of producing Hats and Baskets for both tribes: For Dakal: OC of 1 Hat= OC of 1 Basket = For Sele: OC of 1 Hat OC of 1 Basket = 1 Hat= 1 Basket = Baskets 70 30 d) Who has comparative advantage in the production of Hats? In Baskets? Comparative Advantage in Hat= Comparative Advantage in Basket - e) What should the terms of trade have to be both tribes to gain from trade? (Give me a range) f) If the terms of trade were 1 Hat=7 Baskets, who would refuse to trade - the tribe selling hats or the tribe selling baskets? Circle the correct answer: o Tribe selling hats will refuse o Tribe selling baskets will refuse o Neither tribe will refuse o Both tribes will refuse

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Applied Problems on Trade 1. The following table shows the total number of hats or baskets that the tribes of Dakal and Sele can produce given their resources. For Dakal: OC of 1 Hat OC of 1 Basket = For Sele: a) Who has an absolute advantage in the production of Hats? b) Who has an absolute advantage in the production of Baskets? c) Find the Opportunity Costs of producing Hats and Baskets for both tribes: OC of 1 Hat = OC of 1 Basket = Dakal Sele Hats 10 5 1 Hat= 1 Basket = Name: d) Who has comparative advantage in the production of Hats? In Baskets? Comparative Advantage in Hat = Comparative Advantage in Basket = O Baskets 70 30 e) What should the terms of trade have to be both tribes to gain from trade? (Give me a range) f) If the terms of trade were 1 Hat = 7 Baskets, who would refuse to trade - the tribe selling hats or the tribe selling baskets? Circle the correct answer: o Tribe selling hats will refuse o o Neither tribe will refuse Both tribes will refuse Tribe selling baskets will refuse
Transcribed Image Text:Applied Problems on Trade 1. The following table shows the total number of hats or baskets that the tribes of Dakal and Sele can produce given their resources. For Dakal: OC of 1 Hat OC of 1 Basket = For Sele: a) Who has an absolute advantage in the production of Hats? b) Who has an absolute advantage in the production of Baskets? c) Find the Opportunity Costs of producing Hats and Baskets for both tribes: OC of 1 Hat = OC of 1 Basket = Dakal Sele Hats 10 5 1 Hat= 1 Basket = Name: d) Who has comparative advantage in the production of Hats? In Baskets? Comparative Advantage in Hat = Comparative Advantage in Basket = O Baskets 70 30 e) What should the terms of trade have to be both tribes to gain from trade? (Give me a range) f) If the terms of trade were 1 Hat = 7 Baskets, who would refuse to trade - the tribe selling hats or the tribe selling baskets? Circle the correct answer: o Tribe selling hats will refuse o o Neither tribe will refuse Both tribes will refuse Tribe selling baskets will refuse
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