0:25:0013ofLauren and Andrew can produce cherries or papayas. If they spent their day on producing eitherof the two goods, Lauren can produce up to 30 cherries or 10 papayas and Andrew can produceup to 50 cherries or 10 papayas.Lauren's opportunity cost of producing 1 papaya isAndrew's opportunity cost of producing 1 papaya isLauren has the comparative advantage inadvantage in→papaya.◆cherries.◆ cherries.and Andrew has the comparativeLauren and Andrew can gain from trading if the price falls between→cherries for 1Lauren and Andrew can produce cherries or papayas. If they spent their day on producing eitherond Androw can produce

Answered: Lauren and Andrew can produce cherries…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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0:25:00
13
of
Lauren and Andrew can produce cherries or papayas. If they spent their day on producing either
of the two goods, Lauren can produce up to 30 cherries or 10 papayas and Andrew can produce
up to 50 cherries or 10 papayas.
Lauren's opportunity cost of producing 1 papaya is
Andrew's opportunity cost of producing 1 papaya is
Lauren has the comparative advantage in
advantage in
→
papaya.
◆
cherries.
◆ cherries.
and Andrew has the comparative
Lauren and Andrew can gain from trading if the price falls between
→
cherries for 1
Lauren and Andrew can produce cherries or papayas. If they spent their day on producing either
ond Androw can produce

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“Since you have posted a question with multiple sub-parts, we will solve first three subparts for you. To get the remaining sub-parts solved, please repost the complete question and mention the sub-parts to be solved.”.

Exchanging commodities and services that benefit both sides is what trade is all about. Even when one country has an absolute edge in all products, trade can benefit both parties. Because trade benefits are earned from specializing in one's comparative advantage, this is the case.

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