Barbara and Antoni each work 8 hours a day producing lemonade and pizza. In eight hours, Antoni can produce 400 pints of lemonade or 200 pizzas. In the same amount of time, Barbara can produce 450 pints of lemonade or 300 pizzas. Currently, Antoni decides to produce 200 pints of lemonade and 100 pizzas, and Barbara decides to produce 180 units of each good. Draw the production possibilities frontiers for Barbara and Antoni, with pizza on the x-axis. Include current production points. In your own words, explain absolute advantage. Who has absolute advantage in lemonade production? In pizza production? In your own words, explain comparative advantage. Define opportunity cost and provide an example of an opportunity cost you face in your own life.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Barbara and Antoni each work 8 hours a day producing lemonade and pizza. In eight
hours, Antoni can produce 400 pints of lemonade or 200 pizzas. In the same amount
of time, Barbara can produce 450 pints of lemonade or 300 pizzas. Currently, Antoni
decides to produce 200 pints of lemonade and 100 pizzas, and Barbara decides to
produce 180 units of each good.
Draw the production possibilities frontiers for Barbara and Antoni, with pizza on the
x-axis. Include current production points.
In your own words, explain absolute advantage. Who has absolute advantage in
lemonade production? In pizza production?
In your own words, explain comparative advantage.
Define opportunity cost and provide an example of an opportunity cost you face in
your own life.
Find Barbara's and Antoni's opportunity cost of producing pizza in terms of
lemonade. Who has a comparative advantage?
, Find Barbara's and Antoni's opportunity cost of producing lemonade in terms of
pizza. Who has a comparative advantage?
For what price of pizza (in terms of lemonade) will trade occur between Barbara and
Antoni? Explain.
Transcribed Image Text:Barbara and Antoni each work 8 hours a day producing lemonade and pizza. In eight hours, Antoni can produce 400 pints of lemonade or 200 pizzas. In the same amount of time, Barbara can produce 450 pints of lemonade or 300 pizzas. Currently, Antoni decides to produce 200 pints of lemonade and 100 pizzas, and Barbara decides to produce 180 units of each good. Draw the production possibilities frontiers for Barbara and Antoni, with pizza on the x-axis. Include current production points. In your own words, explain absolute advantage. Who has absolute advantage in lemonade production? In pizza production? In your own words, explain comparative advantage. Define opportunity cost and provide an example of an opportunity cost you face in your own life. Find Barbara's and Antoni's opportunity cost of producing pizza in terms of lemonade. Who has a comparative advantage? , Find Barbara's and Antoni's opportunity cost of producing lemonade in terms of pizza. Who has a comparative advantage? For what price of pizza (in terms of lemonade) will trade occur between Barbara and Antoni? Explain.
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The following graph represents the PPF of Antoni and Barbara;

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