Principles of Microeconomics (Second Edition)
2nd Edition
ISBN: 9780393623840
Author: Lee Coppock, Dirk Mateer
Publisher: W. W. Norton & Company
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Question
Chapter 2, Problem 1SP
(a)
To determine
Calculate the
(b)
To determine
Calculate the
(c)
To determine
Specialization in production of artists.
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Randy and Frank are both landscapers. Randy can mow 12 lawns per day or prune
15 trees. Frank can mow 16 lawns per day or prune 24 trees. Randy and Frank each
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a. Determine who has the absolute advantage at each task, what their respective
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each task.
(Click to select)
(Click to select)
The opportunity cost of mowing a lawn for Randy is
The opportunity cost of mowing a lawn for Frank is
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(Click to select)
has a comparative advantage in pruning trees.
b. Assuming that only one of the tasks is performed, then together Randy and Frank
can service a maximum of
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✓has an absolute advantage in mowing lawns.
✓has an absolute advantage in pruning trees.
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c. If each landscaper fully specializes according to his comparative advantage, then
the maximum number of lawns that can be mowed annually is…
Suppose you and a friend are stranded on an island and must gather firewood and catch fish to survive. Through experience, you know that if each of you spends an entire
day on either activity, the result is given in the following table:
You
Your Friend
Fish
7
8
Firewood
6 bundles
3 bundles
You and your friend decide that you should each specialize so that one person catches fish while the other gathers firewood. But who should do which task?
a. What is the opportunity cost for you to gather an additional bundle of firewood?
fish.
The opportunity cost for you to gather an additional bundle of firewood is
(Round your answer to two decimal places.)
What is your friend's opportunity cost of gathering an extra bundle of firewood?
Your friend's opportunity cost of gathering an extra bundle of firewood is fish.
(Round your answer to two decimal places.)
b. Assuming that you and your friend specialize, what allocation of tasks maximizes total output for your one day of joint effort?
To…
Elif can produce 6 pies or 30cakes in 1 hour. Ahmet can produce 10 pies or 20 cakes in 1 hour.
On the PPF lines, show what Elif produces and what Ahmet produces when they specialize.
When they specialize and trade, what are the total gains from trade?
If Elif and Ahmet share the total gains equally, which quantities of pies and cakes do they trade?
Chapter 2 Solutions
Principles of Microeconomics (Second Edition)
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