Davis Florist has two employees, Anita and Jerome, and two tasks that need to be completed, floral arrangements and floral delivery. It takes Anita 30 minutes to finish one floral arrangement and 40 minutes to make a delivery. It takes Jerome 10 minutes to finish one floral arrangement and 30 minutes to make a delivery. Each worker works six hours per day. a. Draw each worker's production possibility curve. (Hint: Calculate the extreme cases only, a.k.a. if the worker only produced deliveries with the six hours, or they only produced arrangements in six hours.) b. Who has the absolute advantage in making floral arrangements? c. Who has the absolute advantage in making deliveries? d. Draw the comparative advantage table. Calculate the opportunity cost of each task for each student. e. Who has the comparative advantage in floral arrangements? f. Who has the comparative advantage in deliveries? g. Calculate the gains from trade. (Hint: Calculate how many units would be produced by who has absolute advantage in that specific task, and then calculate how many units would be produced by who has the comparative advantage in that specific task. Do this for both tasks.)
Davis Florist has two employees, Anita and Jerome, and two tasks that need to be completed, floral arrangements and floral delivery. It takes Anita 30 minutes to finish one floral arrangement and 40 minutes to make a delivery. It takes Jerome 10 minutes to finish one floral arrangement and 30 minutes to make a delivery. Each worker works six hours per day.
a. Draw each worker's production possibility curve. (Hint: Calculate the extreme cases only, a.k.a. if the worker only produced deliveries with the six hours, or they only produced arrangements in six hours.)
b. Who has the
c. Who has the absolute advantage in making deliveries?
d. Draw the
e. Who has the comparative advantage in floral arrangements?
f. Who has the comparative advantage in deliveries?
g. Calculate the
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