Assume efficient production. Auslaug takes 6.7 hours to weave one blanket or 10 hours to produce one bear skin. Siggy takes 4 hours to weave one blanket or 5 hours to produce one bear skin. Consider the exchange rate between bear skins and blankets when Auslaug and Siggy trade, specifically, the number of bearskins traded for 1 blanket. What is the minimum number of bear skins Auslaug is willing to accept for 1 blanket?
Assume efficient production. Auslaug takes 6.7 hours to weave one blanket or 10 hours to produce one bear skin. Siggy takes 4 hours to weave one blanket or 5 hours to produce one bear skin. Consider the exchange rate between bear skins and blankets when Auslaug and Siggy trade, specifically, the number of bearskins traded for 1 blanket. What is the minimum number of bear skins Auslaug is willing to accept for 1 blanket?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question in image. Been stuck on this for hours. Thanks for your help!

Transcribed Image Text:Assume efficient production. Auslaug takes 6.7 hours to weave one blanket or 10 hours to produce
one bear skin. Siggy takes 4 hours to weave one blanket or 5 hours to produce one bear skin.
Consider the exchange rate between bear skins and blankets when Auslaug and Siggy trade,
specifically, the number of bearskins traded for 1 blanket. What is the minimum number of bear skins
Auslaug is willing to accept for 1 blanket?
1.5
er
0.67 margin of error +/- 10%
Auslaug has the comparative advantage in blanket production. She will produce blankets and
trade them for bearskins. The minimum number of bearskins she will accept for one blanket is
her OC of another blanket. If it were not the case, she could produce the bearskin by herself
and be better off.
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