4. Kristen and Anna live in the beach town of Santa Monica. They own a small business in which they make wristband- and pot holders and sell them to people on the beach. As shown in the table on the following page, Kristen can mak 15 wristbands per hour but only 3 pot holders. Anna is a E slower and can make only 12 wristbands or 2 pot holders i an hour. OUTPUT PER HOUR WRISTBANDS POT HOLDERS risten 15 mna 12 a. For Kristen and for Anna, what is the opportunity cost of a pot holder? Who has a comparative advantage in the pro- duction of pot holders? Explain your answer. b. Who has a comparative advantage in the production of wristbands? Explain your answer. . Assume that Kristen works 20 hours per week in the busi- ness. Assuming Kristen is in business on her own, graph the

ECON MICRO
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ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter2: Economic Tools And Economic Systems
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4. Kristen and Anna 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, Kristen can make
15 wristbands per hour but only 3 pot holders. Anna is a bit
slower and can make only 12 wristbands or 2 pot holders in
an hour.
OUTPUT PER HOUR
WRISTBANDS
POT HOLDERS
Kristen
15
Anna
12
2
a. For Kristen and for Anna, what is the opportunity cost of a
pot holder? Who has a comparative advantage in the pro-
duction of pot holders? Explain your answer.
b. Who has a comparative advantage in the production of
wristbands? Explain your answer.
c. Assume that Kristen works 20 hours per week in the busi-
ness. Assuming Kristen is in business on her own, graph the
Transcribed Image Text:4. Kristen and Anna 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, Kristen can make 15 wristbands per hour but only 3 pot holders. Anna is a bit slower and can make only 12 wristbands or 2 pot holders in an hour. OUTPUT PER HOUR WRISTBANDS POT HOLDERS Kristen 15 Anna 12 2 a. For Kristen and for Anna, what is the opportunity cost of a pot holder? Who has a comparative advantage in the pro- duction of pot holders? Explain your answer. b. Who has a comparative advantage in the production of wristbands? Explain your answer. c. Assume that Kristen works 20 hours per week in the busi- ness. Assuming Kristen is in business on her own, graph the
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