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Once again, consider Babs and Donna, who can each produce cake, beer, or some combination of the two using only 40 hours of labor each. Babs can produce a maximum of 50 cakes if she produces no beer, and 100 units of beer if she produces no cake. Donna can produce a maximum of 100 cakes with no beer produced; if she makes no cake, she can produce 120 units of beer. In autarky, each producer spent half of her time producing cake and the other half producing beer. But now let's say that Babs and Donna decide to trade with each other. They decide that each producer will fully specialize in the good where she has comparative advantage. Later, they will work out the details on how much beer will trade for how many cakes and vice versa. Calculate the gains in trade in cakes that Babs and Donna together (as a group) will experience due to trading. In other words, tell me how many more cakes the two of them can now consume (together) by trading instead of remaining in autarky. (Carefully follow all numeric instructions. If you find Babs and Donna can consume fewer cakes than before, include a negative sign in your answer. Otherwise, enter only a number and a decimal point if needed, rounding your answer to two decimal places as needed.)

Once again, consider Babs and Donna, who can each produce cake, beer, or some combination of the two using only 40 hours of labor each. Babs can produce a maximum of 50 cakes if she produces no beer, and 100 units of beer if she produces no cake. Donna can produce a maximum of 100 cakes with no beer produced; if she makes no cake, she can produce 120 units of beer. In autarky, each producer spent half of her time producing cake and the other half producing beer. But now let's say that Babs and Donna decide to trade with each other. They decide that each producer will fully specialize in the good where she has comparative advantage. Later, they will work out the details on how much beer will trade for how many cakes and vice versa. Calculate the gains in trade in cakes that Babs and Donna together (as a group) will experience due to trading. In other words, tell me how many more cakes the two of them can now consume (together) by trading instead of remaining in autarky. (Carefully follow all numeric instructions. If you find Babs and Donna can consume fewer cakes than before, include a negative sign in your answer. Otherwise, enter only a number and a decimal point if needed, rounding your answer to two decimal places as needed.)

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 5SCQ: If two painters can paint 200 square feet of wall in an hour, and three painters can paint 275...
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Once again, consider Babs and Donna, who can each produce cake, beer, or some combination of the two using only 40 hours of labor each. Babs can produce a maximum of 50 cakes if she produces no beer, and 100 units of beer if she produces no cake. Donna can produce a maximum of 100 cakes with no beer produced; if she makes no cake, she can produce 120 units of beer. In autarky, each producer spent half of her time producing cake and the other half producing beer. But now let's say that Babs and Donna decide to trade with each other. They decide that each producer will fully specialize in the good where she has comparative advantage. Later, they will work out the details on how much beer will trade for how many cakes and vice versa. Calculate the gains in trade in cakes that Babs and Donna together (as a group) will experience due to trading. In other words, tell me how many more cakes the two of them can now consume (together) by trading instead of remaining in autarky. (Carefully follow all numeric instructions. If you find Babs and Donna can consume fewer cakes than before, include a negative sign in your answer. Otherwise, enter only a number and a decimal point if needed, rounding your answer to two decimal places as needed.) MacBook Air 吕口 F3 F4 F5 F6 F7 ト> F8 F9 F1G 23 %24 3 4 5 7 8. E Y U F G
Transcribed Image Text:Once again, consider Babs and Donna, who can each produce cake, beer, or some combination of the two using only 40 hours of labor each. Babs can produce a maximum of 50 cakes if she produces no beer, and 100 units of beer if she produces no cake. Donna can produce a maximum of 100 cakes with no beer produced; if she makes no cake, she can produce 120 units of beer. In autarky, each producer spent half of her time producing cake and the other half producing beer. But now let's say that Babs and Donna decide to trade with each other. They decide that each producer will fully specialize in the good where she has comparative advantage. Later, they will work out the details on how much beer will trade for how many cakes and vice versa. Calculate the gains in trade in cakes that Babs and Donna together (as a group) will experience due to trading. In other words, tell me how many more cakes the two of them can now consume (together) by trading instead of remaining in autarky. (Carefully follow all numeric instructions. If you find Babs and Donna can consume fewer cakes than before, include a negative sign in your answer. Otherwise, enter only a number and a decimal point if needed, rounding your answer to two decimal places as needed.) MacBook Air 吕口 F3 F4 F5 F6 F7 ト> F8 F9 F1G 23 %24 3 4 5 7 8. E Y U F G
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