12. In an hour, Sue can produce 40 caps or 4 jackets and Tessa can produce 80 caps or 4 jackets. a. Calculate Sue's opportunity cost of producing a cap. b. Calculate Tessa's opportunity cost of produc- ing a cap. c. Who has a comparative advantage in produc- ing caps? d. If Sue and Tessa specialize in producing the good in which each of them has a compara- tive advantage, and they trade 1 jacket for 15 caps, who gains from the specialization and trade?
12. In an hour, Sue can produce 40 caps or 4 jackets and Tessa can produce 80 caps or 4 jackets. a. Calculate Sue's opportunity cost of producing a cap. b. Calculate Tessa's opportunity cost of produc- ing a cap. c. Who has a comparative advantage in produc- ing caps? d. If Sue and Tessa specialize in producing the good in which each of them has a compara- tive advantage, and they trade 1 jacket for 15 caps, who gains from the specialization and trade?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![12. In an hour, Sue can produce 40 caps or 4 jackets
and Tessa can produce 80 caps or 4 jackets.
a. Calculate Sue's opportunity cost of producing
a cap.
b. Calculate Tessa's opportunity cost of produc-
ing a cap.
c. Who has a comparative advantage in produc-
ing caps?
d. If Sue and Tessa specialize in producing the
good in which each of them has a compara-
tive advantage, and they trade 1 jacket for
15 caps, who gains from the specialization
and trade?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1a677042-aba3-496f-b6c0-a6c481de7511%2F84df4a3b-227d-48ed-b920-59a4f09e835f%2Frne7bi7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:12. In an hour, Sue can produce 40 caps or 4 jackets
and Tessa can produce 80 caps or 4 jackets.
a. Calculate Sue's opportunity cost of producing
a cap.
b. Calculate Tessa's opportunity cost of produc-
ing a cap.
c. Who has a comparative advantage in produc-
ing caps?
d. If Sue and Tessa specialize in producing the
good in which each of them has a compara-
tive advantage, and they trade 1 jacket for
15 caps, who gains from the specialization
and trade?
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