A) Which producer has the comparative advantage in producing puzzles? Geppetto or Lewis B) Which producer has the comparative advantage in producing puppets? C) If both producers decided to trade with each other to stock their toy stores, which of the following is a range of terms of trade that would benefit both Geppetto and Lewis (1 puppet = x puzzles)?

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter2: Choice In A World Of Scarcity
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A) Which producer has the comparative advantage in producing puzzles?

Geppetto or Lewis

B) Which producer has the comparative advantage in producing puppets?

C) If both producers decided to trade with each other to stock their toy stores, which of the following is a range of terms of trade that would benefit both Geppetto and Lewis (1 puppet = x puzzles)? 

Please explain to me how to solve those questions. Don't just give me the answers. Thank you so much! 

 

Geppetto and Lewis both make puzzles and puppets for their toy stores. The table below compares their production possibilities
schedules.
Production Possibilities Schedules
Geppetto
Lewis
Puzzles
Puppets
Puzzles
Puppets
100
50
80
4
40
5
60
8
30
10
40
12
20
15
20
16
10
20
20
25
Transcribed Image Text:Geppetto and Lewis both make puzzles and puppets for their toy stores. The table below compares their production possibilities schedules. Production Possibilities Schedules Geppetto Lewis Puzzles Puppets Puzzles Puppets 100 50 80 4 40 5 60 8 30 10 40 12 20 15 20 16 10 20 20 25
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