3. Complete the following table and answer the questionsbelow: Toasters Sandwiches Amount Produced in 1 HourMarginal Opportunity cost of producing 1 toaster Amt. Producedin 1 Hr. Marginal Opportunity cost of producing 1 sandwichMorbius 5 5 25 0.2 Vlad 8 3 24 0.33 a. Who has the absoluteadvantage in toasters? b. Who has the absolute advantage insandwiches? c. Who has the comparative advantage intoasters? d. Who has the comparative advantage insandwiches? e. Who should specialize in producing toasters? f.Who should specialize in producing sandwiches? 4. Vlad offersto give Morbius 1 toaster in exchange for 6 sandwiches. a. Isthis a good deal for Vlad? Explain why or why not. b. Is this agood deal for Morbius? Explain why or why not.

The objective of the question is to understand the concepts of absolute advantage, comparative…

Answered: 3. Complete the following table and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Ice cream (millions of gallons per year) 5 A 4 В 3 2 3 4 Milk (millions of gallons per year) The figure above shows the production possibilities frontier for a country. The opportunity cost of a gallon of milk between combination point A and Bis A) 4 gallons of ice cream for a gallon of milk. B) 3 gallons of ice cream for a gallon of milk. C) 1 gallon of ice cream for a gallon of milk. D) 1/3 of a gallon of ice cream for a gallon of milk. E) zero because at point A, zero milk is being produced.
3. Problems and Applications Q3 Janet and Megan are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Janet takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Megan takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. Janet's opportunity cost of brewing a gallon of root beer is has an absolute advantage in brewing root beer, and If Janet and Megan trade foods with each other, and Megan's opportunity cost of brewing a gallon of root beer is has a comparative advantage in brewing root beer. will trade away pizza in exchange for root beer. The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is of root beer, and the lowest price that makes both roommates better off is of root beer per pizza.
1. James and Lisa can grow the following units of produce in a period of time: Tomatoes 180 150 James Lisa Peppers 45 50 a. Explain who has absolute advantage in producing each good. b. Calculate the opportunity cost for each producer and each good. c. Explain who has comparative advantage in producing each good.
The table gives the opportunity cost of producing either a burrito or a taco. Under which of the following terms of trade will Ryan agree to trade, but Daniel will not? Opportunity Cost of Each Product Таco Burrito Daniel 2 burritos 4 taco Ryan 1 burrito 1 taco O A. 3 burritosG tacos B. 12 burritos: 8 tacos O C. 21 burritos: 5 tacos
6
7. Two people make up a small economy producing oats and/or shirts. The table below shows the maximum each individual can produce in one day for each good (and any linear combination). Sam Lindsay Oats 300 150 Shirts 100 75 a) Who has the comparative advantage in producing Oats? In producing shirts? b) In terms of shirts, what is the cost of producing one unit of oats for Sam? For Lindsay? c) If the total number of shirts produced is 100, then how many units of oats will be produced if production takes place according to comparative advantage?
Self Check question #4- a,b,c,d,e
Use the table of production possibilities below to answer the follows. Pecans (tons) Cranberries (tons) United States 15 5 Canada 84 Which of the following is true about this data? 1Select one: a. The United States has the absolute advantage in producing pecans. b. Canada has the absolute advantage in producing cranberries. c. Canada has the absolute advantage in producing pecans. d. Canada has a lower opportunity cost for the production of pecans. e. Neither country can benefit from specialization and trade. that

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