Bundle: Principles of Microeconomics, Loose-Leaf Version, 7th + Aplia, 1 term Printed Access Card
7th Edition
ISBN: 9781305135444
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 2, Problem 4PA
Sub part (a):
To determine
Production possibility frontierof quantity of car washed and quantity of lawns mowed.
Sub part (b):
To determine
Production possibility frontierof quantity of car washed and quantity of lawns mowed.
Sub part (c):
To determine
Production possibility frontierof quantity of car washed and quantity of lawns mowed.
Sub part (d):
To determine
Production possibility frontierof quantity of car washed and quantity of lawns mowed.
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Barbara and Antoni each work 8 hours a day producing lemonade and pizza. In eight
hours, Antoni can produce 400 pints of lemonade or 200 pizzas. In the same amount
of time, Barbara can produce 450 pints of lemonade or 300 pizzas. Currently, Antoni
decides to produce 200 pints of lemonade and 100 pizzas, and Barbara decides to
produce 180 units of each good.
Draw the production possibilities frontiers for Barbara and Antoni, with pizza on the
x-axis. Include current production points.
In your own words, explain absolute advantage. Who has absolute advantage in
lemonade production? In pizza production?
In your own words, explain comparative advantage.
Define opportunity cost and provide an example of an opportunity cost you face in
your own life.
Find Barbara's and Antoni's opportunity cost of producing pizza in terms of
lemonade. Who has a comparative advantage?
, Find Barbara's and Antoni's opportunity cost of producing lemonade in terms of
pizza. Who has a comparative advantage?
For…
Discuss the concept of Economic Goods.
Country X and Country Y are neighbours. Both Country X and Country Y can produce two goods: food and
clothing. In one week, Country X can produce 4,400 clothing units or 2,200 food units, or a mix of the
two. In one week, Country Y can produce 5,000 clothing units or 2,000 food units, or a mix of the two.
For both Country X and Country Y, their individual trade-offs between clothing units and food units are
constant, regardless of how they allocate their time. Currently, Country X produces 2,400 clothing units
and 1,000 food units per week while Country Y produces 2,500 clothing units and 1,000 food units per
week.
a. How is absolute advantage different from comparative advantage?
b. Which country has the absolute advantage in food production? Which country has the absolute
advantage in clothing production? Briefly explain.
Chapter 2 Solutions
Bundle: Principles of Microeconomics, Loose-Leaf Version, 7th + Aplia, 1 term Printed Access Card
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