Bundle: Principles of Microeconomics, Loose-Leaf Version, 7th + Principles of Macroeconomics, Loose-Leaf Version, 7th + MindTap Economics, 2 terms (12 ... for Mankiw’s Principles of Economics, 7th
7th Edition
ISBN: 9781337380300
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 3, Problem 1CQQ
To determine
The absolute advantage .
Expert Solution & Answer
Answer to Problem 1CQQ
Option ‘d’ is the correct answer.
Explanation of Solution
Option (d)
Ron has the absolute advantage in washing, since he can wash 3 cars per hour, while David can only wash 2 cars per hour. None has the absolute advantage in mowing as both can only mow 1 lawn in an hour’s time. So option ‘d’ is correct.
Option (a)
David can only wash 2 cars per hours, whereas Ron can wash 3 cars in the same amount of time. So David does not have the absolute advantage in washing cars. Also, both do not have the advantage over the other in mowing the lawn. So option ‘a’ is incorrect.
Option (b)
Ron has an absolute advantage in washing, since he can wash 3 cars per hour, while David can only wash 2 cars per hour but both do not have the advantage over the other in mowing the lawn. So option ‘b’ is incorrect.
Option (c)
None has the absolute advantage in mowing as both can only mow 1 lawn in an hour’s time but Ron has the absolute advantage in washing, since he can wash 3 cars per hour, while David can only wash 2 cars per hour. So option ‘c’ is incorrect.
Economics Concept Introduction
Concept Introduction:
Absolute advantage: It is the ability to produce a good using fewer inputs than another producer does.
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Table 1
Minnie
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Table 1 shows the output per week of two people, Minnie and Mickey. They can either devote
their time to making hats or making umbrellas.
1) Refer to Table 1. Which of the following statements is true?
A) Mickey has an absolute advantage in making both products.
B) Minnie has an absolute advantage in making both products.
C) Minnie has an absolute advantage in making hats and Mickey in making umbrellas.
D) Minnie has an absolute advantage in making umbrellas and Mickey in making hats.
2) Refer to Table 1. What is Minnie's opportunity cost of making a hat?
A) 1/5 of an umbrella
B) 1/4 of an umbrella
C) 4 umbrellas
D) 10 umbrellas
3) Refer to Table 1. What is Mickey's opportunity cost of making a hat?
A) 1/10 of an umbrella
B) 1/5 of an umbrella
C) 5 umbrellas
D) 10 umbrellas
4) Refer to Table 1. Which of the following statements is true?
A) Minnie has a comparative advantage in making both products.
B) Mickey has a comparative advantage in…
Farmer Jones and Farmer Smith graze their cattle on the same field. If there are 20 cows grazing in the field each cow produces $4000 of milk. If there are more cows in the field, then each cow produces can eat less grass and the milk production falls. With 30 cows on the field each produces $3000 of milk, with 40 cows each produces $2000 of milk . Cows cost $1000 a piece. Assume that Farmer Jones and farmer Smith can buy either 10 cows or 20 cows, find out the Dominant Strategy of Farmer Jones and express the same in formal language. I want to see all the steps.
Chapter 3 Solutions
Bundle: Principles of Microeconomics, Loose-Leaf Version, 7th + Principles of Macroeconomics, Loose-Leaf Version, 7th + MindTap Economics, 2 terms (12 ... for Mankiw’s Principles of Economics, 7th
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