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 julias daily PPC What is the opportunity cost to each of making one loaf of bread? Martha's opportunity cost of making a loaf of bread muffins Julia's opportunity cost of making a loaf of bread muffins What is the opportunity cost to each of making one muffin? Martha's opportunity cost of making a muffin loaves of bread Julia's opportunity cost of making a muffin loaves of bread Who has the comparative advantage in making bread? Julia Martha Neither Who has the absolute advantage in making bread? Neither Martha Julia 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? Martha because her opportunity cost of making bread is lower than Julia's. Julia because her opportunity cost of making bread is lower than Martha's. Martha because her opportunity cost of making bread is higher than Julia's. Julia because her opportunity cost of making bread is higher than Martha's.

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 julias daily PPC

What is the opportunity cost to each of making one loaf of bread?

Martha's opportunity cost of making a loaf of bread muffins

Julia's opportunity cost of making a loaf of bread muffins

What is the opportunity cost to each of making one muffin?

Martha's opportunity cost of making a muffin loaves of bread

Julia's opportunity cost of making a muffin loaves of bread

Who has the comparative advantage in making bread?

Julia
Martha
Neither

Who has the absolute advantage in making bread?

Neither
Martha
Julia

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?
Martha because her opportunity cost of making bread is lower than Julia's.
Julia because her opportunity cost of making bread is lower than Martha's.
Martha because her opportunity cost of making bread is higher than Julia's.
Julia because her opportunity cost of making bread is higher than Martha's.

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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