Suppose Martha and Julia both work at a bakery making bread and muffins. In an hour, Martha can either make 10 loaves of bread or 40 muffins, while Julia can either make 12 loaves of bread or 60 muffins. Both Martha and Julia work 8 hours a day.Draw Martha's daily PPC.Draw Julia's daily PPC.What is the opportunity cost to each of making one loaf of bread?What is the opportunity cost to each of making one muffin?Who has the comparative advantage in making bread? Why?Who has the absolute advantage in making bread? Why?Suppose you are the owner of the bakery. If Julia and Martha are currently both spending all of their time making muffins, then which of them should you ask to start making bread?Draw the combined daily PPC of Martha and Julia.Suppose you are the owner of the bakery. If you want 500 muffins to be made in a day, then how are you going to assign the work between Martha and Julia?

Comparative advantage is based on opportunity cost. Absolute advantage is based on the number of…

Answered: Suppose Martha and Julia both work at a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose Martha and Julia both work at a bakery making bread and muffins. In an hour, Martha can either make 10 loaves of bread or 40 muffins, while Julia can either make 12 loaves of bread or 60 muffins. Both Martha and Julia work 8 hours a day.
Draw Martha's daily PPC.
Draw Julia's daily PPC.
What is the opportunity cost to each of making one loaf of bread?
What is the opportunity cost to each of making one muffin?
Who has the comparative advantage in making bread? Why?
Who has the absolute advantage in making bread? Why?
Suppose you are the owner of the bakery. If Julia and Martha are currently both spending all of their time making muffins, then which of them should you ask to start making bread?
Draw the combined daily PPC of Martha and Julia.
Suppose you are the owner of the bakery. If you want 500 muffins to be made in a day, then how are you going to assign the work between Martha and Julia?

Definition Video Definition Ability of a country to produce more output with a given level of input or to produce the same level of output with a lower level of input as compared to the other countries. For example, if Country A produces 200 units with the help of 10 units of labor, and Country B produces 300 units with 10 units of labor, Country A has an absolute advantage in the production of the good. Video

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