Question 3 Person 1 can allocate her 8-hour day between the production of two goods A and B. Each hour devoted to Good B yields 2 units whereas each hour devoted to Good A produces 4 units.a) State whether 9units of Good B and 12 units of Good A are attainable, unattainable, efficient or inefficient. (State all that applies)b) Person 2, can produce3 units of Good B or 4 units of Good A per hourwho has the absolute advantage in the production of Good B?c) who has the absolute advantage in the production of Good A?d) Calculate the opportunity cost for Good B for Person 2e) Calculate the opportunity cost for Good A for person 1f) who has the comparative advantage in the production of Good B?g) who has the comparative advantage in the production of Good A?

Name: Question 3 Person 1 can allocate her 8-hour day between the production
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Description: Question 3 Person 1 can allocate her 8-hour day between the production of two goods A and B. Each hour devoted to Good B yields 2 units whereas each hour devoted to Good A produces 4 units.a) State whether 9units of Good B and 12 units of Good A are

Person 1 can produce two goods, i.e., A and B Person 1 can produce 4 units of good A per hour Person…

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ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter2: Economic Tools And Economic Systems

Section: Chapter Questions

Problem 3.7P

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Question 3

Person 1 can allocate her 8-hour day between the production of two goods A and B. Each hour devoted to Good B yields 2 units whereas each hour devoted to Good A produces 4 units.

a) State whether 9units of Good B and 12 units of Good A are attainable, unattainable, efficient or inefficient. (State all that applies)
b) Person 2, can produce3 units of Good B or 4 units of Good A per hour

who has the absolute advantage in the production of Good B?

c) who has the absolute advantage in the production of Good A?
d) Calculate the opportunity cost for Good B for Person 2
e) Calculate the opportunity cost for Good A for person 1
f) who has the comparative advantage in the production of Good B?

g) who has the comparative advantage in the production of Good A?

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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