PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 2, Problem 2.4CC
To determine
The effect of differences in
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Students have asked these similar questions
Both Bob and Laura can work 6 hours per day in either market work for a wage or in home production. In particular, they can work at home to
make meals or work in the labor market to purchase ingredients for those meals. Their production possibilities per hour are in the table below.
Imagine Laura and Bob get married to enjoy the economic gains from specialization and division of labor in marriage, and the person who has
the comparative advantage in cooking meals specializes in cooking meals while the person with the comparative advantage in labor market
works specializes in labor market work. If they still need to each eat 3 meals per day (for a total of 6 meals), what are Bob and Laura's joint
gains from marriage in terms of purchased ingredients?
Bob
Laura
Numeric Response
Meals per hour $ of Ingredients
per hour
1
1
20
15
Suppose that Cassie can produce 10 pounds of tuna per hour or 20 pounds of apple per hour, and Samantha can produce 20 pounds of tuna per hour or 10 pounds of apples per hour. Cassie and Samantha both want 80 pounds of tuna and 80 pounds of apple per day.
a. How many hours must Cassie and Samantha work per day if they don't help each
other?
b. Suppose they decide to work together. Now how many hours each day do they have to work?What is the economic explanation for the reduction in hours?
The principle of comparative advantage does not provide answers to certain questions. One of those questions is
Do specialization and trade benefit more than one party to a trade?
Is it absolute advantage or comparative advantage that really matters?
How are the gains from trade shared among the parties to a trade?
Is it possible for specialization and trade to increase total output of traded goods?
Chapter 2 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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- I am eight hour day Andy can produce either 24 loaves of bread or 8 kilograms of butter. In an eight hour day Rolfe can produce either 8 loaves of bread or 8 kilograms of butter. a)what is Andy's opportunity cost of producing one loaf of bread? What is rolfes opportunity cost of producing one loaf of bread b) who has the comparative advantage in bread production? Who has comparative advantage in butter production? c)would they both gain from specialization and trade in other each other? Show it through a numerical examplearrow_forwardI recently sent in a similiar question and was rejected for a reason that didn't make sense to me. This is a homework problem that I am unable to solve and there are several like them, I really need assistance because I am unable to understand how to even get the answer.arrow_forwardCountry A can produce one Outfit in 6 hours and one unit of Corn in 2 hour. Country B can produce one Outfit in 17 hours and one unit of Corn in 6 hours. Which of the following statements is true? Group of answer choices A) If trade opens, Country B will tend to specialize in the production of Outfits while A will tend to specialize in the production of Corn – then gains from trade would typically be possible. B) Country B has a comparative advantage in Corn and will specialize in the production of Corn if trade opens. C) Country B has an absolute advantage in the production of both Corn and Outfits. D) None of the other options. E) If trade opens, Country A will tend to specialize in the production of Outfits while B will tend to specialize in the production of Corn – then gains from trade would typically be possible.arrow_forward
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