Bundle: Principles of Economics, Loose-Leaf Version, 8th + Aplia, 2 terms Printed Access Card
8th Edition
ISBN: 9781337607711
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 3, Problem 3CQQ
To determine
Comparative advantage and production possibility frontier .
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When two countries decide to specialize and exchange, both countries will be able to consume
a. at a point on the production possibilities frontier
b. at a point outside the production possibilities frontier
c. at anypoint point inside the production possibilities frontier
Debra can make either 12 cakes or 16 cookies in 4 hours. Sam can make either 6 cakes or 12 cookies in 4 hours.c. If both Debra and Sam concentrate on producing only the product in which they havea comparative advantage, how many cakes and how many cookies will they produce?
Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks. Which of the following is not possible?
a.
Jim has an absolute advantage in the production of hockey sticks and a comparative advantage in the production of baseball bats.
b.
Jim has an absolute advantage in the production of baseball bats and a comparative advantage in the production of hockey sticks.
c.
Jim has an absolute advantage in the production of baseball bats and in the production of hockey sticks.
d.
Jim has a comparative advantage in the production of baseball bats and in the production of hockey sticks.
Chapter 3 Solutions
Bundle: Principles of Economics, Loose-Leaf Version, 8th + Aplia, 2 terms Printed Access Card
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- As the manager at a local florist, you supervise two employees, Anita and Jerome. There are two tasks that need to be completed: floral arrangements and flower delivery. It takes Anita 30 minutes to finish one floral arrangement and it takes her 40 minutes to make one delivery. It takes Jerome 10 minutes to finish one floral arrangement and it takes him 30 minutes to make one delivery. a. Who has a comparative advantage in floral arrangements? What about deliveries? b. Suppose, initially, Jerome and Anita each spent 4 hours each day doing floral arrangements and 2 hours each day doing deliveries. If you changed their tasks so that each individual did nothing but the task for which they had a comparative advantage, how many more floral arrangements would your store make, and how many more deliveries?arrow_forwardGeorge and Laura live on an island in the Caribbean. Their diet is fish and biscuits. George can bake 20 biscuits or spear 10 fish each day, while Laura can bake 48 biscuits or spear 12 fish each day. For each person, costs remain constant. According to the preceding information, Select one: a. George has a comparative advantage in the production of both goods. b. Laura has a comparative advantage in the production of both goods c. George has a comparative advantage in producing biscuits, and Laura has a comparative advantage in producing fish. d. George has a comparative advantage in producing fish, and Laura has a comparative advantage in producing biscuitsarrow_forwardThere are two countries: Country A and Country B. These countries have the same amount of resources and both produce the same two goods, pencils and markers. The opportunity cost of pencils in Country A is ½ markers per pencil and the opportunity cost of pencils in Country B is 4 markers per pencil. Which country has a comparative advantage in each good? Group of answer choices Country A has a comparative advantage in both goods Country B has a comparative advantage in both goods Country A has a comparative advantage in markers; Country B has a comparative advantage in pencils Country A has a comparative advantage in pencils; Country B has a comparative advantage in markersarrow_forward
- If the state of Texas has a lower opportunity cost for producing beef compared to Alaska, then... Group of answer choices Texas has a comparative advantage in beef and should just produce beef for itself and not export to other states like Alaska. Texas has an absolute advantage in beef and should share expertise with Alaska so they can develop an absolute advantage as well. Texas has a comparative advantage in beef, and Alaska should purchase beef from Texas. Texas has an absolute advantage in beef, and Alaska should purchase beef from Texas.arrow_forwardREAD THOROUGHLY! Molly is Person A; John is person B 2 people from the same house do two things: they give rides and deliver meals Molly can provide 4 taxi rides or 2 meal deliveries in an hour. John can provide 5 taxi rides or 4 meal deliveries in an hour. Who has the absolute advantage in the provision of taxi rides? Who has the comparative advantage in the provision of taxi rides? Absolute advantage: Person A Comparative advantage: Person A Absolute advantage: Person B Comparative advantage: Person A Absolute advantage: Person A Comparative advantage: Person B Absolute advantage: Person B Comparative advantage: Person B What is a price of taxi rides (in terms of meal deliveries) at which BOTH Molly and John will be better o" by specialization and trade?arrow_forwardThe figure below depicts the production possibilities curve (PPC) of a country. It also depicts the consumption possibilities curve (CPC) when the country is engaged in trade with one other country. Point C is this country's consumption when that trade occurs. Quantity of 350 good y 300 250 200 150 100 50 0 0 20 40 19 C 60 80 100 120 Quantity of good x Calculate how much this country trades with the other country in good y when the two countries engage in free trade. Enter a whole number only. Enter a positive number if this country exports good y, and a negative number if it imports it. Enter O if the answer cannot be obtained with the information given. Since this is a graphical question, approximate answers (within 20 of the exact answer) are accepted. Hint: consider how much the country produces and consumes this good.arrow_forward
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