Study Guide for Mankiw's Brief Principles of Macroeconomics, 7th
Study Guide for Mankiw's Brief Principles of Macroeconomics, 7th
7th Edition
ISBN: 9781285864266
Author: N. Gregory Mankiw
Publisher: Cengage Learning
Question
Book Icon
Chapter 3, Problem 1QCMC
To determine

The absolute advantage.

Expert Solution & Answer
Check Mark

Answer to Problem 1QCMC

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.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
General Accounting Question solution and give me Blank ? C
It is possible to use transformational leadership strategies to reach unethical objectives.  Traditional leadership theories and morals standards are not adequate to help employees solve complex organizational issues. For the statement above, argue in position for both in favor or opposed to the statements.
Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning