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1. Janica and Jency live in the beach town of Santa Monica. They own a small business in which they make wristbands and pot holders and sell them to people on the beach. As shown in the table on the following page, Janica can make 15 wristbands per hour but only 3 pot holders. Jency is a bit slower and can make only 12 wristbands or 2 pot holders in an hour Wristband (output per hr) | Pot Holders (output per hr) Janica 15 3 Jency 12 a. For Janica and for Jency, what is the opportunity cost of pot holder? Who has a comparative advantage in the production of pot holders? Explain your answer. b. Who has a comparative advantage in the production of wristbands? Explain your answer. c. If Janica devoted half of her time (10 out of 20 hours) to wristbands and half of her time to pot holders, how many of each would she produce in a week? If Jency did the same, how many of each would she produce? How many wristbands and pot holders would be produced in total?

1. Janica and Jency live in the beach town of Santa Monica. They own a small business in which they make wristbands and pot holders and sell them to people on the beach. As shown in the table on the following page, Janica can make 15 wristbands per hour but only 3 pot holders. Jency is a bit slower and can make only 12 wristbands or 2 pot holders in an hour Wristband (output per hr) | Pot Holders (output per hr) Janica 15 3 Jency 12 a. For Janica and for Jency, what is the opportunity cost of pot holder? Who has a comparative advantage in the production of pot holders? Explain your answer. b. Who has a comparative advantage in the production of wristbands? Explain your answer. c. If Janica devoted half of her time (10 out of 20 hours) to wristbands and half of her time to pot holders, how many of each would she produce in a week? If Jency did the same, how many of each would she produce? How many wristbands and pot holders would be produced in total?

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Production And Growth
Section: Chapter Questions
Problem 5CQQ
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осТ. 12, 2021 MICROECONOMICS SUMMATIVE ASSESSMENT 1. Janica and Jency live in the beach town of Santa Monica. They own a small business in which they make wristbands and pot holders and sell them to people on the beach. As shown in the table on the following page, Janica can make 15 wristbands per hour but only 3 pot holders. Jency is a bit slower and can make only 12 wristbands or 2 pot holders in an hour Wristband (output per hr) Pot Holders (output per hr) Janica 15 3 Jency 12 2 a. For Janica and for Jency, what is the opportunity cost of pot holder? Who has a comparative advantage in the production of pot holders? Explain your answer. b. Who has a comparative advantage in the production of wristbands? Explain your answer. c. If Janica devoted half of her time (10 out of 20 hours) to wristbands and half of her time to pot holders, how many of each would she produce in a week? If Jency did the same, how many of each would she produce? How many wristbands and pot holders would be produced in total? | 2. Explain how each of the following situations would affect a nation's production possibilities curve. a. A technological innovation allows the nation to more efficiently convert solar energy into electricity. b. A prolonged recession increases the number of unemployed workers in the nation. c. A category 5 hurricane destroys over 40 percent of the nation's productive capacity. d. The quality of education in the nation's colleges and universities improves greatly.
Transcribed Image Text:осТ. 12, 2021 MICROECONOMICS SUMMATIVE ASSESSMENT 1. Janica and Jency live in the beach town of Santa Monica. They own a small business in which they make wristbands and pot holders and sell them to people on the beach. As shown in the table on the following page, Janica can make 15 wristbands per hour but only 3 pot holders. Jency is a bit slower and can make only 12 wristbands or 2 pot holders in an hour Wristband (output per hr) Pot Holders (output per hr) Janica 15 3 Jency 12 2 a. For Janica and for Jency, what is the opportunity cost of pot holder? Who has a comparative advantage in the production of pot holders? Explain your answer. b. Who has a comparative advantage in the production of wristbands? Explain your answer. c. If Janica devoted half of her time (10 out of 20 hours) to wristbands and half of her time to pot holders, how many of each would she produce in a week? If Jency did the same, how many of each would she produce? How many wristbands and pot holders would be produced in total? | 2. Explain how each of the following situations would affect a nation's production possibilities curve. a. A technological innovation allows the nation to more efficiently convert solar energy into electricity. b. A prolonged recession increases the number of unemployed workers in the nation. c. A category 5 hurricane destroys over 40 percent of the nation's productive capacity. d. The quality of education in the nation's colleges and universities improves greatly.
3. The nation of Routarou is able to produce turnips and potatoes in combinations represented by the data in the following table. Each number represents thousands of bushels. A в D E Turnips 100 90 70 40 Potatoes 10 20 30 40 Plot this data on a production possibilities graph and explain why the data shows that Routarou experiences increasing opportunity costs.
Transcribed Image Text:3. The nation of Routarou is able to produce turnips and potatoes in combinations represented by the data in the following table. Each number represents thousands of bushels. A в D E Turnips 100 90 70 40 Potatoes 10 20 30 40 Plot this data on a production possibilities graph and explain why the data shows that Routarou experiences increasing opportunity costs.
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