Bundle: Principles of Macroeconomics, Loose-Leaf Version, 7th + LMS Integrated Aplia, 1 term Printed Access Card
7th Edition
ISBN: 9781305242500
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 3, Problem 1QCMC
To determine
The
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Sue
Tom
Good A
10
4
Select one:
Good B
15
5
As shown in the table above, Sue and Tom each can produce two different types of goods.
For Sue, if she only produces Good A, then she can produce 10 units of Good A per day. If
she only produces Good B, then she can produce 15 units of Good B per day.
For Tom, if he only produces Good A, then she can produce 4 units of Good A per day. If she
only produces Good B, then she can produce 5 units of Good B per day.
Which of the following statement is correct about comparative advantage?
O a. Tom has a comparative advantage over Sue in the production of Good A. Sue has a
comparative advantage over Tom in the production of Good B
O b.
Tom has a comparative advantage over Sue in both tasks
O c.
Sue has a comparative advantage over Tom in both tasks
O d. Sue has a comparative advantage over Tom in the production of Good A. Tom has a
comparative advantage over Sue in the production of Good B
Which of these scenarios is inefficient and why?
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 Macroeconomics, Loose-Leaf Version, 7th + LMS Integrated Aplia, 1 term Printed Access Card
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