Let's say Mike and Johnson manufacture hamburgers and T-shirts. Johnson makes 7 hamburgers or 4 T-shirts per day, while Mike makes 10 hamburgers or 3 T-shirts daily. Assume they have the time to commit to either creating T-shirts or hamburgers. (a) The production possibility curve should be drawn. b) Who enjoys the absolute advantage producing both? c) Whose opportunity cost of producing T-shirts is higher?

Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter3: Interdependence And The Gains Rrom Trade
Section3.2: Comparative Advantage: The Driving Force Of Specialization
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Let's say Mike and Johnson manufacture hamburgers and T-shirts. Johnson makes 7 hamburgers or 4 T-shirts per day, while Mike makes 10 hamburgers or 3 T-shirts
daily. Assume they have the time to commit to either creating T-shirts or hamburgers.
(a) The production possibility curve should be drawn.
b) Who enjoys the absolute advantage producing both?
c) Whose opportunity cost of producing T-shirts is higher?
Transcribed Image Text:Let's say Mike and Johnson manufacture hamburgers and T-shirts. Johnson makes 7 hamburgers or 4 T-shirts per day, while Mike makes 10 hamburgers or 3 T-shirts daily. Assume they have the time to commit to either creating T-shirts or hamburgers. (a) The production possibility curve should be drawn. b) Who enjoys the absolute advantage producing both? c) Whose opportunity cost of producing T-shirts is higher?
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