Principles of Microeconomics
7th Edition
ISBN: 9781305156050
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 3, Problem 3PA
Subpart (a):
To determine
Absolute and comparative advantage .
Subpart (b):
To determine
Comparative advantage and specialization.
Subpart (c):
To determine
Comparative advantage, specialization and price.
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Jake and Jill spend their time picking apples and strawberries. The quantities they can pick in an hour are shown in the table below.
Quantity Picked in One Hour
Pounds of Apples Pounds of Strawberries
Jake
8
4
Jill
10
10
Suppose Jake specializes in picking apples, and Jill specializes in picking strawberries. If Jake and Jill then trade 3 apples for 2
strawberries, Jake will end up consuming
Suppose Jake specializes in picking apples, and Jill specializes in picking strawberries. If Jake and Jill work for one hour, then trade 3
apples for 2 strawberries, Jake will end up consuming
apples and
strawberries.
Complete the following logical statement: "Because of , individuals and societies must make choices, and they must therefore consider the opportunity cost of every action."Maria and Kevin need to decide which one of them will take time off from work to complete the rather urgent task of shearing their llamas. Maria is pretty good with a pair of shears; she can shear the llamas in 1 hour. Kevin is somewhat slow; it takes him 5 hours to shear the llamas. Maria earns $190 per hour as a psychiatrist, while Kevin earns $15 per hour as a cobbler.
Keeping in mind that either Maria or Kevin must take time off from work to shear the llamas, who has the lower opportunity cost of completing the task?
Maria
Kevin
Maria and Kevin face identical opportunity costs
Rafael's PPF
Naomi's PPF
30
30
25
25
20
20
A
15
15
10
10
A
5
10
15
20
25
30
10
15
20
25
Rackets
Rackets
Refer to the diagrams above. Suppose that before trading, Rafael and Naomi had been producing at point A on their respective PPF.
Then suppose they choose to specialize and trade. After specializing they trade 8 Rackets for 8 Balls. After this trade, Rafael will
consume
and
Select one:
а.
20 Rackets;
8 Balls
b. 8 Rackets;
8 Balls
C.
8 Rackets;
12 Balls
d. 12 Rackets;
8 Balls
Balls
Balls
30
Chapter 3 Solutions
Principles of Microeconomics
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