advantage can also be The comparative demonstrated with agents rather than countries. Let's say that Angela Merkel and her husband live in a world in which Merkel has not retired yet, and they need only two goods, chancellorship for Germany and academic physics papers. Angela Merkel is a politician and a physicist, she can produce policies for Germany at a cost of 80 hours work, and physics papers at the cost of 90 hours work. Her husband is not a politician, so his cost of producing policies for Germany is high (120 hours). He is a chemist rather than a physicist, so he is also worse at writing physics papers, but his education is close enough, he can write a paper within 100 hours. They both have a budget of 1000 work hours left before retirement (i.e. Merkel has 1000h and her husband also has 1000h). As in real life, it is possible to produce imperfect policies and working papers rather than peer-reviewed articles (e.g., 1.45 policies and 1.9 papers). If they trade optimally, how much do they each produce? Merkel produces policies and papers. Her husband produces papers. policies and

advantage can also be The comparative demonstrated with agents rather than countries. Let's say that Angela Merkel and her husband live in a world in which Merkel has not retired yet, and they need only two goods, chancellorship for Germany and academic physics papers. Angela Merkel is a politician and a physicist, she can produce policies for Germany at a cost of 80 hours work, and physics papers at the cost of 90 hours work. Her husband is not a politician, so his cost of producing policies for Germany is high (120 hours). He is a chemist rather than a physicist, so he is also worse at writing physics papers, but his education is close enough, he can write a paper within 100 hours. They both have a budget of 1000 work hours left before retirement (i.e. Merkel has 1000h and her husband also has 1000h). As in real life, it is possible to produce imperfect policies and working papers rather than peer-reviewed articles (e.g., 1.45 policies and 1.9 papers). If they trade optimally, how much do they each produce? Merkel produces policies and papers. Her husband produces papers. policies 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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Question

Economics
MITXT 14.009x
The comparative advantage can also be
demonstrated with agents rather than countries.
Let's say that Angela Merkel and her husband
live in a world in which Merkel has not retired
yet, and they need only two goods,
chancellorship for Germany and academic
physics papers. Angela Merkel is a politician and
a physicist, she can produce policies for
Germany at a cost of 80 hours work, and physics
papers at the cost of 90 hours work. Her
husband is not a politician, so his cost of
producing policies for Germany is high (120
hours). He is a chemist rather than a physicist, so
he is also worse at writing physics papers, but
his education is close enough, he can write a
paper within 100 hours.
They both have a budget of 1000 work hours
left before retirement (i.e. Merkel has 1000h and
her husband also has 1000h). As in real life, it is
possible to produce imperfect policies and
working papers rather than peer-reviewed
articles (e.g., 1.45 policies and 1.9 papers). If they
trade optimally, how much do they each
produce?
Merkel produces
policies and
papers.
Her husband produces
papers.
policies and

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