Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781337091985
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 3, Problem 2CQQ
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Jared takes 10 minutes to wash dishes and 20 minutes to write a paper. Jason takes 10 minutes to wash dishes and 30 minutes to write a paper. Which
of the following statements is correct?
Jared has a comparative advantage in writing a paper.
O Jared has absolute advantage in writing the paper.
Jared has a comparative advantage in washing dishes.
O Jared has absolute advantage in washing the dishes.
Tina can allocate her 8-hour day between baking and cooking. Each hour devoted to baking yields 2 cakes whereas each hour spent cooking produces 4 plates of food. Tina's neighbor, Ingrid, can produce 3 cakes or 4 plates of food per hour.
Who has the absolute advantage in the production of cakes?
Who has absolute advantage in the production of food?
Who has a comparative advantage in the production of cakes?
Who has a comparative advantage in the production of food?
What is the opportunity cost for food?
6. Given that Nathan has 10 acres and can grow 15 bales of hay or 40 bushels of corn on anacre, while Simon has 10 acres and can grow 20 bales of hay or 35 bushels of corn per acre
a. What is the maximum amount of corn and hay that they can jointly produce?b. Does Nathan have a comparative advantage in growing hay?c. Does Simon have an absolute advantage in growing hay?d. What is the opportunity cost to Nathan of one bale of hay?
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Brief Principles of Macroeconomics (MindTap Course List)
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- lee and Tre produce two goods in an 8-hour day. lee can produce 10 capital or 55 consumables and Tre can produce 75 capital and 60 consumables. Who has the absolute advantage I the production of consumables? Who has the absolute advantage in the production of capital? Who has a comparative advantage in the production of capital? Who has a comparative advantage in the production of consumables? What is the opportunity cost for capital?arrow_forwardPaul's PPF Sue's PPF Cheese Cheese 100 60 40 30 20 80 Ham 36 90 Ham The graph above shows that Paul has a comparative advantage in the production of [Select] Y and Sue has a comparative advantage in the production of [Select] cheese both goods neither good ham Paul's PPF Sue's PPF Cheese Cheese 100 60 40 30 20 80 Ham 36 90 Ham Based on the graph above, which of the following statements is true? O Paul can only benefit from trading with Sue if a tax is imposed on the goods produced by Sue. O Since Paul is so uncompetitive compared with Sue, he will be better off by not trading at all with Sue. O Even though Sue is more productive than Paul in making cither of the two goods, Paul and Sue can both still benent from trading with each other. O Since Sue is more competitive than Paul in both goods, she has nothing to gain by trading with Paul.arrow_forwardThese figures illustrate the production possibilities available to Barney and Betty with eight hours of labour in their bakery. Loaves of Bread Barney Pies Loaves of Bread 20 Betty 15 Plesarrow_forward
- In one month, Manal can knit 2 sweaters or 4 scarves. In one month, Tamara can knit 1 sweater or 3 scarves. Given this information, which of the following statements is TRUE? O Manal has a comparative advantage in knitting scarves but not in knitting sweaters O Manal has a comparative advantage in knitting neither sweaters nor scarves O Manal has a comparative advantage in knitting both sweaters and scarves O Manal has a comparative advantage in knitting sweaters but not in knitting scarvesarrow_forwardMary can wax 6 cars per day or wash 4 cars per day and John can wax 3 cars per day or wash 3 cars per day. What is each person’s opportunity cost of waxing one car? Who has an absolute advantage of waxing cars? Who has an absolute advantage in washing cars? Who has comparative advantage in washing cars ? ars?arrow_forwardConsider two individuals, Fred and Barney. In one hour, Fred can produceeither 15 gallons of beer, or 3 gallons of wine. In one hour, Barney can produce2 gallons of beer or 4 gallons of wine. Assume both goods can be produced incontinuous quantities. Explain who has the comparative advantage in producing each good. Specific calculations of opportunity cost should be part of your explanation. Use this information to help draw the PPF for the entire economy for one hour if Fred and Barney work together with wine on the horizontal axis. Be sure to put specific numbers on each intercept. Give specific values for the MRT at each point and identify any point where the MRT changes.arrow_forward
- Look at F where it says Liz has comparative advantage. Why is it that she has comparative advantage over mike in cleaning windows when mike has comparative advantage in picking up leaves? What’s the difference?arrow_forwardIn Italian restaurant, Jack needs 1 hour and a half to prepare pizza and 1 hour to make lasagna. Pascal needs 2 hours to make a pizza and 1 hour and a half to make a lasagna. Which one has the comparative advantage in preparing pizza, in preparing lasagna. Explain your answer. Which one has the absolute advantage in preparing lasagna, in preparing Pizza. Explain your answer.arrow_forwardGiven Ted can wax 4 cars per day or wash 2 cars per day and Tom can wax 3 cars per day or wash 1 car per day. What is each man’s opportunity cost of waxing a car? Who has an absolute advantage of waxing cars? Who has a comparative advantage of waxing cars?arrow_forward
- In Italian restaurant, Jack needs one hour and a half to prepare pizza and one hour to make lasagna. Pascal needs two hours to make a pizza and one hour and a half to make a lasagna. Which one has the comparative advantage in preparing pizza, in preparing lasagna. Explain your answer. Which one has the absolute advantage in preparing lasagna, in preparing Pizza. Explain your answer.arrow_forwardREAD THOROUGHLY! Molly is Person A; John is person B 2 people from the same house do two things: they give rides and deliver meals Molly can provide 4 taxi rides or 2 meal deliveries in an hour. John can provide 5 taxi rides or 4 meal deliveries in an hour. Who has the absolute advantage in the provision of taxi rides? Who has the comparative advantage in the provision of taxi rides? Absolute advantage: Person A Comparative advantage: Person A Absolute advantage: Person B Comparative advantage: Person A Absolute advantage: Person A Comparative advantage: Person B Absolute advantage: Person B Comparative advantage: Person B What is a price of taxi rides (in terms of meal deliveries) at which BOTH Molly and John will be better o" by specialization and trade?arrow_forwardGive an example in which one person has an absoluteadvantage in doing something but another personhas a comparative advantagearrow_forward
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